"Megafon" petitioned for the purchase of "Svyaznoy"

Perhaps, the deal will be followed by the merger of the retailer with Euroset.
The Federal Antimonopoly Service (FAS) is considering a petition of Lefbord Investments Limited, controlled by Megafon, to purchase Svyaznoy Logistics (a key company of the Svyaznoy retail group). This follows from the message of the department. Also, Megafon intends to purchase the St. Petersburg company Mobile Telecommunications Service, it says.

An application for the purchase of "Connected Logistics" and "Mobile Telecommunications Service" was also submitted by Atomelia Investments Limited, the FAS reports. This is also the structure of Megafon, said his representative. At the same time, the company applied for the acquisition of three Euroset-affiliated companies - Euroset-Retail, Pro-Service and EU-Leasing.

When petitions are filed, the FAS does not specify. The consideration of applications was extended until May 21.

A representative of Megafon confirmed that applications to the FAS were filed.

Euroset plus Svyaznoy

In February, Megafon closed the deal to acquire a 50% stake in another cellular retailer, Euroset, from VimpelCom. Now the operator controls 100% of the retail network. The plans of the merger of "Svyaznoy" and "Euroset" owner of the controlling "Connected" Solvers Group Oleg Malis said at a meeting with the retailer's management in August 2017. So, several participants of this meeting told Vedomosti earlier. Later, Megafon officially announced that it was studying the possibility of a deal with Svyaznoy as one of the options for the development of Euroset.

According to a person familiar with the managers of Svyaznoy, at the first stage, two retail chains will be merged into a single holding. Radical reduction in the number of communication stores is not planned, he said. The amount of the transaction being prepared and other conditions the interlocutor of Vedomosti was difficult to name.

Does not disclose the terms of a possible transaction and Megafon. The operator is considering various options for the development of Euroset, he says. Since the filing of the petition does not oblige to conclude a deal, and the review process can be lengthy, Megafon sent the documents to the FAS in advance, the operator's representative asserts.

Megafon and Solvers are discussing a deal to merge Svyaznoy and Evroset, as a result of which Megafon could become a minority shareholder of the merged company. So says a source close to one of the parties to the deal. Another source, close to one of the parties to the deal, spoke about such an opportunity earlier.

We are talking about the potential merger of Svyaznoy and Evroset, as a result of which Megafon could become a minority shareholder of the merged company, Solvers representative commented on the situation.

With Euroset taking into account the sale of a part of the business, VimpelCom has slightly more than 2,000 stores, said Mikhail Burmistrov, general director of Infoline Analytics. Svyaznoy has slightly less than 2,800, and Megafon has about 3,400 (including franchising), he said. And the number of MegaFon stores is decreasing according to the strategy of optimizing the retail business, Burmistrov says.