Iliad founder Niel buys Ukraine’s third-largest mobile provider By Reuters

By Investor Empires On Sep 10, 2024

Written by Gianluca Lo Nostro

(Reuters) – A consortium of investors led by French billionaire Xavier Niel has closed the deal to acquire Ukrainian mobile phone operator LifeCell and merge it with data provider DataGroup Volia, investment firms involved in the deal said on Monday.

Why is it important?

Lifecell is Ukraine’s third-largest mobile operator after VEON (NASDAQ: VEON) subsidiary Kyivstar and Vodafone (NASDAQ: VODAFONE). The company will merge with Datagroup-Volia, a fixed-line and pay-TV operator.

Lifecell was wholly owned by Turkcell. In April, a Kiev court cleared the way for the takeover by lifting a freeze on Lifecell shares held by sanctioned Russian billionaire Mikhail Fridman, who owned a roughly 20% stake through LetterOne.

Main quote

“Completing this historic deal will signal to others that Ukraine offers compelling opportunities and that the time to invest is now,” Neal said in a statement.

In numbers

Turkcell said on Monday the deal was worth at least $524.3 million, with the European Bank for Reconstruction and Development and the International Finance Corporation providing $435 million in loans, the companies said.

The new platform is expected to attract around 10 million mobile users, and more than 4 million people connected via the fixed access network.

Context

NJJ Holding, the leading investor alongside Horizon Capital, is one of the investment vehicles used by Neil. It is the sole owner of Atlas (NYSE:) Investissement, which is also the majority shareholder of telecom group Millicom.

Thomas Reynaud, chief executive of Iliad, the core of Nil Group’s overall telecoms business, told Reuters in August that his company would not be the parent company of the new Ukrainian provider.

What’s next?

The international player emerging from the merger may improve competition between closely-knit operators in Ukraine’s telecoms trio as war with Russia weighs on the resilience of mobile providers, KyivStar’s chief executive told Reuters on Thursday.