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Telia sells off MegaFon stake for $1B to exit Russia

Telia sells off MegaFon stake for $1B to exit Russia

Telia Company has fully divested its holding in Russia’s market leader MegaFon, selling its 19% stake in the operator for RUB60.4 billion ($1 billion) to investment bank Gazprombank.

The Swedish group, which is in the process of pulling out of the Eurasia region, was the second largest shareholder in MegaFon – even after divesting a further 6% stake in early October, which it sold for RUB22.5 billion.

An original precondition of this deal was that Telia would not sell any further shares in MegaFon for ninety days following the 6% stake sale. However, the terms governing this pledge only applied if Telia divested a part of its remaining stake, rather than the entire holding.

Telia CEO Johan Dennelind said: “Telia Company is one of the founders of MegaFon and we have since the inception actively contributed to its success of becoming a mobile and digital leader in Russia. This divestment now puts an end to Telia Company’s ownership in MegaFon in accordance with our strategy to focus on the Nordics and Baltics.”

In 2015, Telia announced that it would exit the Eurasia region to focus on its core markets. This decision was prompted by an investigation into the operator by the US Department of Justice (DoJ) and Securities and Exchange Commission (SEC) over its activities in the market. The operator ended up paying $1 billion to settle the matter.

In addition to exiting Russia, in September Telia divested part of its holding in Turkcell and is aiming to sell some of its stake in Fintur Holdings, which oversees its interests in Azerbaijan, Georgia, Kazakhstan and Moldova.

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