Russia watchdog in favor of Rostelecom-Tele2 tie-up: reports

MOSCOW Thu Apr 25, 2013 10:41am EDT

A woman passes by an office of Russian telecoms firm Rostelecom in Moscow, November 21, 2012. REUTERS/Maxim Shemetov

A woman passes by an office of Russian telecoms firm Rostelecom in Moscow, November 21, 2012.

Credit: Reuters/Maxim Shemetov

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MOSCOW (Reuters) - Russia's anti-monopoly regulator on Thursday said it would be in favor of combining the Russian business recently sold by Nordic telecoms group Tele2 (TEL2b.ST) with state-controlled operator Rostelecom (RTKM.MM), as it would increase competition.

Tele2 sold its Russian business to state-controlled bank VTB (VTBR.MM) in a surprise $3.55 billion deal. Analysts see Rostelecom, the fifth-biggest mobile player behind Tele2, as the most likely ultimate buyer.

"I like the idea at first glance," Igor Artemyev, the head of the Federal Anti-monopoly Service (FAS), was quoted by news agencies Interfax and RIA news agency as saying.

"We have discussed it a little bit. Because Rostelecom has mobile assets, and if you add up Tele2, a fourth player will emerge on the market - a strong (player) who will rival the other three strong players," said Artemyev.

He said that neither Rostelecom nor any other company has so far asked for permission to acquire the Tele2 assets from VTB.

Tele2 completed its deal with VTB within days after it was announced, rejecting offers to look into two alternative bids - jointly by Russia's biggest and third-biggest mobile phone operators MTS (MBT.N) and Vimpelcom VIP.N and by A1 - the investment vehicle of Vimpelcom's co-owner Mikhail Fridman.

VTB's chief financial officer Herbert Moos said on Wednesday the bank planned to cut its holding in the Tele2 unit below a controlling stake within the coming year and was already in talks with Russian and foreign investors.

(Reporting by Maria Kiselyova; Editing by Elaine Hardcastle)

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