* MegaFon to hold joint control of Euroset with Vimpelcom
* Two-step deal sees MegaFon take 50 pct after one year
* MegaFon buying stake from tycoon Alexander Mamut
MOSCOW, Dec 7 MegaFon ,
Russia's No.2 mobile operator, has completed a $1.07 billion
deal to buy a stake in cellphone retailer Euroset to expand the
number of shops through which it can sell its services.
MegaFon, controlled by Russia's richest man Alisher Usmanov,
announced plans in October to buy half of Euroset, pitting it
against rival Vimpelcom which owns the remainder of the
asset. MegaFon competes against Russia's biggest operator MTS
as well as No.3 Vimpelcom.
Under the deal, Lefbord Investments - owned equally by
MegaFon and Usmanov's Garsdale vehicle - has bought 50 percent
of Euroset for $1.07 billion. It will pay an additional $100
million if Euroset meets certain targets.
After one year, MegaFon will buy Garsdale's stake in
Lefbord, gaining full control over 50 percent of Euroset,
MegaFon said on Friday.
MegaFon previously said the deal could cost it up to $1.33
billion, which includes other costs such as interest payments.
MegaFon and Garsdale are buying the stake from tycoon
Alexander Mamut, who has been looking to sell his holdings since
last December. Mamut also holds a stake in Russian miner
Vimpelcom said on Friday it had increased its ownership
interest in Euroset by 0.1 percent to give it 50 percent
control, giving it equal economic and governance rights in the
company. Vimpelcom previously had a minority interest in Euroset
with more limited governance rights, it said in a statement.
Euroset has 5,500 stores in Russia and Belarus and will
boost the distribution power of MegaFon, which runs 1,750 of its
own stores and 2,000 franchisee shops, according to VTB
MegaFon in November raised $1.7 billion in an initial public
offering in London and Moscow.