Russia's VimpelCom to snap up Wind Mobile for $6 billion
updated 04:25 pm EDT, Thu March 17, 2011
VimpelCom to buy Wind Mobile for $6 billion
Russian cellphone provider VimpelCom on Thursday announced plans to acquire Canadian cell carrier Wind Mobile. The $6 billion deal would likely conclude in the first half of 2011 and result in the fifth-largest provider in the world, with 173 million subscribers. Egypt-based Orascom is owned by VimpelCom and also has a significant share in Wind.
The move should allow the new company to grow out its network and offer a greater range of devices, with the company even mentioning tablets. Also, international roaming and long-distance services could also be offered.
The efforts may run into some legal issues, however, as Wind and Orascom have faced a challenge in the past from the Canadian government related to the amount of foreign ownership. Earlier this year, the Canadian government overruled an exemption that let Wind launch its company. Orascom Telecom has a 32 percent voting share and 65 percent of fiscal equity in Globalive, who owns Wind. Canadian laws require that a local firm can have no more than a 20 percent ownership share from a foreign company.
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Vimpelcom is not buying Wind Mobile in Canada, they are buying Orascom, the main shareholder of Wind Mobile Canada (but less than 50%), Wind Mobile Italy [WIND Telecom] is in that deal but not Wind Mobile Canada.