Ties are getting bigger – Newspaper Kommersant No. 16 (7461) dated 01/30/2023

As it became known to Kommersant, Rostelecom is negotiating the acquisition of MegaFon from USM Group. There are other contenders for the operator, Kommersant’s sources say, and USM itself has already begun restructuring telecommunications assets. The value of this business is now affected by the economic situation and problems with access to equipment, and the transfer of key technological assets to the state will help reduce risks, experts say. The ultimate owner of VimpelCom, which the Veon holding intends to transfer to top management, according to Kommersant’s data, may also be structures associated with the state.

A Kommersant source close to the government said that at the end of 2022, the issue of Rostelecom’s purchase of MegaFon from USM Group was submitted for approval. The state operator’s interest in the asset is confirmed by three more market participants. Kommersant’s interlocutors, close to MegaFon, specify that other investors, including non-core ones, are also interested in the asset.

A source close to USM emphasizes that MegaFon is demonstrating good results, so offers to buy it have been received for several years: “It is logical that there are always applicants for the company. Any offer, of course, and sale options will be considered, but, of course, everything depends on the specific conditions.” The Federal Antimonopoly Service reported to Kommersant that Rostelecom had not applied for the acquisition of MegaFon. Rostelecom, MegaFon and USM declined to comment. In Mintsifra “Kommersant” did not answer.

At the end of 2022, MegaFon began acquiring telecommunications-related companies from USM. So, in December, oneFactor (engaged in the development of analytical platforms based on artificial intelligence), 100% software developer and provider of business support systems Nexign (Nexign brand), passed from YueSeM Telecom LLC (part of USM holding) to MegaFon, and in January – Inplat (is engaged in processing payments on the Internet, works with VKontakte, Odnoklassniki and other services). One of Kommersant’s sources admits that the assets are being restructured ahead of the sale.

At the end of 2021, USM has already exited another major asset: structures associated with Gazprom consolidated the majority of VK’s voting shares. The deal to sell MegaFon may be a continuation of the redistribution of key technological assets in favor of the state, says Leonid Delitsyn from FG Finam. Indeed, the sale of VimpelCom by Veon holding to Russian top management is now being discussed, but Kommersant’s sources claim that a new investor will eventually buy the asset, naming Gazprom and Sberbank structures among the applicants.

Negotiations on Vimpelcom may also affect the cost of MegaFon, Leonid Delitsyn believes: “Now is a good time to acquire the telecommunications business, since the price is affected by the growing risks of limited availability of equipment due to sanctions – the issue has not been fundamentally resolved.” Vimpelcom was valued at 370 billion rubles in the autumn as part of the sale to management. (net debt 240 billion rubles). “Usually, telecommunications companies are valued based on a multiplier of 1.75 to revenue, so MegaFon can be valued at 616 billion rubles,” notes Mr. Delitzin. “But the final price will depend on how the debt is structured.”

Now Rostelecom owns 100% of Tele2 shares, and the acquisition of the second largest operator in the market after MTS will make the state holding the undisputed leader in the mobile communications segment, Mr. Delitsyn notes. According to him, the transition of the telecommunications business under state control, on the one hand, will help solve problems with access to equipment and maintain the quality of service, but a decrease in competition in the medium term will lead to higher prices.

Julia Silence, Nikita Korolev, Tatyana Isakova