VimpelCom Ltd, the newly-formed entity that controls Russia’s third-largest mobile operator (VimpelCom) and Ukraine’s largest (Kyivstar), is reported to be planning to buy a majority stake in Egypt’s Orascom Telecom. According to Russian newspaper Kommersant, VimpelCom Ltd is eyeing a deal worth US$6.5 billion to buy Orascom’s Italian mobile firm (WIND) and take a 51 percent stake in Orascom itself. “The deals suggest a near-doubling of Vimpelcom’s scale at the revenue level and turning it into a truly international player with diversified geographical exposure,” UniCredit Securities analysts wrote in a research note. According to sources – which say a deal could be announced soon – VimpelCom is looking to fund the deal via a combination of cash and shares. This would see Orascom’s owners get around 20-23 percent of voting shares in VimpelCom Ltd, while VimpelCom’s existing major shareholders – Alfa-Group and Norway’s Telenor – would see their shareholdings decrease to 27 percent and 35 percent, respectively.

VimpelCom Ltd was formed last year after its major shareholders agreed to merge their holdings in a new US-listed entity, ending a dispute over ownership of the firm that ran for almost five years. Meanwhile, while Orascom has made recent high-profile moves into Canada and North Korea, it has been suffering in some of its largest markets, notably Algeria. Bloomberg reported separately today that Orascom swung to a US$41.4 million net loss in the second-quarter after booking US$120 million in foreign-exchange losses.  The firm reported net income of US$129.5 million a year ago. Sales fell from US$1.3 billion to US$1 billion.