Akin Gump, Hogan Lovells, Linklaters lead on $1.2bn MegaFon mobile deal

Akin Gump Strauss Hauer & Feld, Hogan Lovells and Linklaters have taken the lead roles as Russian telephone giant MegaFon acquires an indirect 50 per cent stake in Russian mobile retailer Euroset for $1.2bn (£750m).

Oxana Balayan
Oxana Balayan

The deal sees Cyprus-based Lefbord Investments acquire a 50 per cent stake in Euroset. Lefbord is jointly owned by MegaFon and Garsdale Services Investment, the offshore vehicle owned by Russian billionaire Alisher Usmanov, MegaFon’s majority shareholder.

As part of the same transaction, the country’s third largest mobile operator, Vimpelcom, which trades under the name Beeline in Russia, has also acquired a 0.1 per cent stake in Euroset to boost its overall stake to 50 per cent, putting it on an equal footing with MegaFon.

Akin Gump acted for both Garsdale and Vimpelcom. Moscow-based corporate finance partner Vladimir Kouznetsov is one of the primary partners involved, with the Garsdale side handled by a team in Moscow and the Vimpelcom side by a separate team in London.

While Akin Gump acted for these two entities, Linklaters was brought in as an independent adviser to MegaFon. Moscow corporate managing associate Lev Loukhton led on the deal.

Linklaters Amsterdam-based corporate partner Bart Jan Kuck also advised both MegaFon and Garsdale on the Dutch law aspects of the acquisition.

Hogan Lovells advised Russian businessman Alexander Mamut, who owns Euroset, on the sale of his stake. The firm also advised Mamut on the further 0.1 per cent stake sale to Vimpelcom.

Moscow managing partner and CIS corporate head Oxana Balayan led the team. Amsterdam corporate chief Johannes Buntjer acted on the Dutch law aspects of the team and corporate finance partner Maegen Morrison provided additional support from London.

According to the terms of the deal, which closed last week, one year after closing MegaFon is set to acquire Garsdale’s 50 per cent stake in Lefbord Investments, thereby taking control of Lefbord’s entire 50 per cent stake in Euroset.

The deal follows the news last month that Russia’s antitrust watchdog had approved the terms of the transaction.

Background to this deal:

Neither Linklaters nor Hogan Lovells were involved in the recent MegaFon $1.7bn IPO, which attracted an army of firms including Cleary Gottlieb Steen & Hamilton and Freshfields Bruckhaus Deringer in headline roles (28 November 2012).

Hogan Lovells acted on certain aspects of Mamut’s original purchase of Euroset in 2008 when the Russian billionaire bought the business from Russian business men Yevgeny Chichvarkin and Timur Artemiev for $1.25bn. The firm’s relationship with Euroset also predates Mamut’s involvement in the mobile group.

Hogan Lovells has a track record of advising on a number of major Russian telecoms deals, including acting for Russia’s largest phone company Rostelecom last year on acquiring a $1.08bn stake in National Telecommunications.

Akin Gump acts as regular counsel to both MegaFon and Vimpelcom. Earlier this year the firm, alongside Skadden Arps Slate Meagher & Flom and White & Case, landed a lead role on MegaFon’s $8.5bn shareholder restructuring (25 April 2012).

Akin Gump, Skadden and White & Case are also Vimpelcom’s primary external legal advisers.