MOSCOW Swedish telecoms firm Tele2 (TEL2b.ST) and Russia's Rostelecom (RTKM.MM) are discussing a merger of their Russian mobile assets into an entity that would hand control to Tele2, business daily Vedomosti reported on Tuesday.
Rostelecom would have an option to buy out Tele2 three years after the deal, according to a scheme that is currently being discussed, Vedomosti wrote, adding that Tele2 has picked Morgan Stanley (MS.N) to advise on the possible deal.
State-controlled Rostelecom, aiming to raise its game in mobile, broadband and pay-TV to offset losses in core fixed-line business, said in August Tele2 was the only big potential target but denied it was in acquisition talks.
Tele2 rejected suggestions that it would be forced to reach a deal with a strategic partner in Russia after it failed to secure licenses allowing to boost its offering of high-growth data services. Analysts say it could gain new growth opportunities through a tie-up with Rostelecom.
Tele2 and Rostelecom were not immediately available for comment. (Reporting by Maria Kiselyova; Editing by Douglas Busvine)