Chairman of the board of AFK Sistema Vladimir Evtushenkov
Photo: Mikhail Razuvaev
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Telecom Italia Won't Have Russian Share
AT&T, the largest communications company in the United States, and Mexican cellular operator American Movil plan to go in together to buy 66 percent of the stock in the Olimpia company from Pirelli for ˆ7 billion. Olimpia owns 18 percent of Italia Telecom. AFK Sistema was thought to be a contender for that package as well, but the Russian company has now admitted that its latest attempt to enter a communications market beyond the CIS has failed.
Pirelli now owns 80 percent of Olimpia, whose only asset is its share in Telecom Italia. Pirelli spokesmen said that the deal with the North Americans may be concluded by the end of the month, causing Telecom Italia stock quotes to rise 12 percent when the Milan Stock Exchange opened yesterday. Telecom Italia's capitalization on Friday was ˆ40 billion, which means that it gained ˆ4.8 billion in less than a day.
Telecom Italia was formed in 1964 through the merger of five telephone companies. As of September 30, 2006, it was Italy's leader on the market of landlines (24 million numbers, 72.8 percent) and mobile lines (31.5 million subscribers, 40.3 percent). The company's proceeds in the first nine months of 2006 were ˆ23.1 billion.
It became known in the middle of January of this year that a deal was ready between Sistema and Pirelli. However, Sistema head Vladimir Evtushenkov told the Bloomberg Agency last Thursday that such a deal was “unlikely.” The North American investors offered approximately one-third over the market price for the shares though, guaranteeing their success. In 2005, Vodafone beat out Sistema in a bid for Turkish operator Telsim, and last year the Etisalat consortium of Arab companies beat Sistema to win the third GSM license in Egypt. Sistema's subsidiary Sitronics acquired the Greek Intracom last year.
www.kommersant.com
All the Article in Russian as of Apr. 03, 2007
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