Ukraine Suspends VimpelCom Deal On Day Of Share Debut

MOSCOW, Russia -- Ukraine's antitrust authority Thursday said it has suspended its earlier approval of a $22 billion tie-up between Kyivstar and Russian mobile operator OAO Vimpel Communications after a rival company complained about their market share and use of mobile spectrum.

VimpelCom's Beeline Brand

Astelit, part-owned by Turkey's Turkcell AS, petitioned Ukrainian authorities to re-examine the deal, and the Antimonopoly Committee of Ukraine said it will "check the information we received in order not to allow monopolization."

Astelit told authorities to consider VimpelCom Ltd.'s share of 2009 mobile revenue in Ukraine, rather than merely its subscriber count, since some Ukrainians have more than one mobile phone, the antitrust regulator said. It should also review the companies' share of GSM spectrum, some of which is used by the Ministry of Defense, the committee's statement said.

A final decision will either confirm the committee's earlier approval of the merger, deny it, or require shareholders of newly created VimpelCom Ltd. to take further steps.

VimpelCom Ltd., which was to assume OAO VimpelCom's VIP ticker on the New York Stock Exchange Thursday, declined to comment immediately on the Ukrainian announcement. Part-owner Telenor ASA of Norway said a Ukrainian review of the decision could take several months.

VimpelCom shareholder Alfa Group said it hasn't received documents from Ukraine but it doesn't expect legal consequences arising from the regulator, since all regulatory criteria were satisfied when the deal closed.

"In the worst-case scenario, the creation of VimpelCom Ltd. being reversed, the company's minorities would get OAO VimpelCom's shares back, which might be listed back on the NYSE until the conflict with the Ukrainian regulator has been resolved," VTB Capital analyst Victor Klimovich said. The company may have to give up some frequency spectrum in Ukraine in order to placate the authorities there, he said.

VimpelCom Ltd. said Wednesday that 97.87% of OAO VimpelCom's shareholders had tendered their shares in the offer to merge with Kyivstar, above the required 95% threshold. The remaining shareholders will be squeezed out in a process to be detailed by May 26.

Source: The Wall Street Journal