TeliaSonera, Alfa to merge MegaFon, Turkcell stakes

STOCKHOLM (Reuters) - TeliaSonera (TLSN.ST) and Alfa Group said on Thursday they would combine their Eurasian mobile assets, a move that could help them resolve a bitter dispute over ownership of top Turkish operator Turkcell (TCELL.IS).

TeliaSonera, the Nordic region's biggest telecom operator, said on Thursday it had agreed with Russian oil-to-telecoms group Alfa to combine their holdings in mobile operators MegaFon in Russia and in Turkcell.

Telia has been sparring with unlisted Turkish conglomerate Cukurova since 2005 when the Turkish group backed away from a deal to sell shares in Turkcell to Telia, opting instead to form a venture with Alfa.

In August, an arbitration tribunal ordered Cukurova to sell its remaining stake in Turkcell Holding to Telia for $3.1 billion.

Telia said it and Alfa Group's telecoms investment arm would now collaborate on efforts to resolve legal disputes between them and Cukurova.

Telia's Eurasia business head, Tero Kivisaari, said he believed a deal with Cukurova could be reached within a year and the new company set up in two years.

The deal follows a pact between Norway's Telenor (TEL.OL) and Alfa Group, led by billionaire Mikhail Fridman, which in October agreed to merge their Russian and Ukrainian holdings after a long struggle over ownership.

CONTROL

Telia has said it wants control of its core holdings, but the deal with Alfa looks to be as close as it is going to get in Russia and Turkey, where the new firm will have 90 million subscribers.

"It is a deal that both players can be satisfied with -- a marriage of convenience," said John Strand, chief executive of telecoms consultancy Strand Consult.

Shares in Telia were up 5.2 percent at 1200 GMT.

TeliaSonera said the holdings would form a new company to be listed on the New York Stock Exchange, with Turkcell and MegaFon continuing to be managed as separate operations.

The listing should mean that MegaFon will start paying dividends, something Telia has been demanding for some time.

"If they (Telia) can begin to get a dividend from MegaFon, that means forecasts for Telia's dividend will rise," Sven Skold, analyst at Swedbank said.

TeliaSonera Chief Executive Lars Nyberg said in a news conference MegaFon had "plenty of cash."

"I think a regular dividend policy is very important, long term. But there is clearly room for a one-time payment as well because of the accumulated cash over the last five years," Nyberg said.

Anna Lepetukhina, telecoms analyst at Troika Dialog in Moscow, said the move was positive for overseas investment in Russia as it allowed for public investment in MegaFon.

"Currently one can only invest in (mobile operators) MTS (MBT.N) and Vimpelcom (VIP.N) in Russia. This gives investors a wider choice, and MegaFon is a really strong player," she said.

Alfa Group holds 25.1 percent of the shares in MegaFon, the third-largest mobile operator in Russia, through its telecoms arm Altimo, as well as 4.99 percent of Turkcell.

TeliaSonera owns 37.3 percent of Turkcell and 43.8 percent of Megafon.

(Additional reporting by John Bowker in Moscow and Tarmo Virki in Helsinki, Editing by Erica Billingham and Simon Jessop)