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October 5, 2010 12:45 PM

Akin Gump, Cleary Advise on $21.5 Billion Telecom Tie-Up

Posted by Brian Baxter

Russia's second-largest mobile phone operator is closing in on a merger to create the world's fifth-largest mobile carrier by number of subscribers.

The Associated Press reports that Amsterdam-based VimpelCom will merge its phone assets with Weather Investments, a privately held telecommunications investment company owned by Egyptian billionaire and telecom mogul Naguib Sawiris. The companies turned to two longtime outside legal advisers from Am Law 100 firms to negotiate the deal.

Daniel Walsh, an M&A partner with Akin Gump Strauss Hauer & Feld in London, is leading a team from the firm advising VimpelCom that includes international finance partner Fred Heller and M&A partners Patrick Dooley and Sebastian Rice, according to U.K. publication Legal Week.

Akin Gump has advised VimpelCom on a series of transactions in Russia, Ukraine, and Kazakhstan that have built the telecom into a dominant wireless and mobile phone provider in countries that are part of the Russian sphere of influence. A year ago this month, the firm helped VimpelCom negotiate a $23 billion merger with Ukraine's largest mobile phone operator, Kyivstar. (VimpelCom's general counsel is Jeffrey McGhie, a former associate and counsel in Akin Gump's Moscow office.)

Representing Weather were Cleary Gottlieb Steen & Hamilton M&A partners Pierre-Yves Chabert and Gamal Abouali in Paris. Cleary has long represented the Sawiris family and its Orascom group of companies, of which Weather is a part.

Weather is a holding company for Egyptian and Italian telecoms that provide services to more than 100 million subscribers throughout the Middle East, Africa, and Asia, Legal Week reports. (Weather controls Wind Telecommunicazioni, the third-largest mobile operator in Italy, as well as Egypt's Orascom Telecom Holding, whose general counsel is Ragy Soliman.)

Under the terms of the agreement announced Monday, VimpelCom will own 51.7 percent of Weather's Orascom Telecom and all of Wind Telecommunicazioni, according to The AP. Weather shareholders would receive $1.8 billion in cash, as well as 326 million shares of VimpelCom stock representing a 20 percent interest in the newly merged company (and an 18.5 percent voting interest). The two entities, Bloomberg reports, had combined total revenue of $21.5 billion in 2009.

Pending approval by regulatory bodies in various countries--Sawiris has given the deal a 90 percent chance of making it--the transaction is expected to close sometime in the first quarter of 2011.

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