Telenor/ Alfa conflict

For about one year, Telenor and Altimo, the telecom arm of Alfa Group in Russia, have been in conflict to control Vimpelcom (Russia) and Kyivstar (Ukraine) both in shares and board seats. Alfa owns a 44% stake in Kyivstar, while Telenor owns 56%. Telenor owns about 27% in Vimpelcom, while Alfa will increase its stake to 35.8% after Oct. 27. Telenor wants to expand Vimpelcom operations outside Russia and CIS, while Altimo would prefer VimpelCom to expand in CIS countries and particularly in Ukraine against Kyivstar. To improve their respective position, both companies could buy Vimpelcom stock on the open market, but it will be rapidly too expensive. So the two likely scenarii are either a “divorce” by swapping their stakes in Vimpelcom and Kyivstar, or Vimpelcom buying Kyivstar. Telenor has welcomed a merger between VimpelCom and Kyivstar, creating a strong regional operator. But the pear is not yet ripe!