PRESS: Shareholders mull merger of Euroset, Svyaznoy – source

MOSCOW, Mar 22 (PRIME) -- A split of Russian handset retailer Euroset, now being negotiated by its co-owners, mobile operators MegaFon and VimpelCom, could be followed by a possible merger of the seller with its competitor Svyaznoy into a new company managing almost 5,000 stores, business daily Kommersant reported on Wednesday, citing several sources.

“There is a plan to make a deal to set up a separate company managing stores of the both retailers,” one of the sources told Kommersant, adding that its founders will be MegaFon and Svyaznoy’s co-owners, and possibly, there will be more shareholders.

At the first stage, the merged company of Euroset and Svyaznoy could run about 5,000 stores, including over 2,000 stores of the former and 2,700 stores of the latter. In the future, the chain could be raised to 6,000 stores. A name of the new company is yet to be chosen, perhaps, it will be a new brand, one of the sources said.

Euroset with over 4,000 stores is owned in halves by MegaFon and VimpelCom, which are discussing a way to divide the business.

According to a person close to the two operators, they signed a protocol of intent stipulating MegaFon’s consolidation of Euroset in exchange for 2,000 stores, which VimpelCom will turn into its monobrand outlets. VimpelCom will also pay 1.25 billion rubles to cover Euroset’s debt, amounting to some 9 billion rubles as of the end of 2016.

(57.2323 rubles – U.S. $1)

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