Veon pulls out of Ucom merger talks in Armenia

Veon pulls out of Ucom merger talks in Armenia

Veon has abandoned talks relating to a possible sale of its Armenian unit Veon Armenia (Beeline) to local rival Ucom.

Ucom, which provides mobile, fixed and broadband services in Armenia, submitted a proposal for the acquisition of Veon’s larger local unit to the country’s Public Services Regulatory Commission (PSRC) on 30th December last year.

The potential deal was made public on 15th January 2020, prompting the antitrust body SCPEC (State Commission for Protection of Economic Competition of the Republic of Armenia) to begin its reviewing process for the application in February.

Veon’s Corporate Communications Director Kieran Toohey confirmed yesterday (6th May) that it had been scrapped. The firm provided no reason for the decision, but there had been public disagreements between Ucom’s shareholders and management.

Notably, in April the local Arka News Agency reported that several hundred Ucom employees – including co-founders Hayk and Aleksandr Yesayan - chose to resign after learning that if the merger concluded successfully, Ucom’s senior shareholders planned to appoint Beeline CEO Andrey Pyatakhin to lead the resulting unit.

The Yesayan brothers were part of the team that founded Ucom in 2009. They announced in April that they planned to found a new operator called Unet, at which time Ucom’s major shareholders were becoming drawn into an escalating scandal which led them to accuse Armenia’s government of “trying to illegally alienate” the operator. The Prime Minister’s office refuted this claim.

Veon’s future in Armenia is now uncertain. The operator’s Beeline unit is the second-largest in the market, with Ucom taking third place.

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