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

By Gianluca Lo Nostro

(Reuters) – A consortium of investors led by French billionaire Xavier Niel has closed the transaction to acquire and merge Ukrainian mobile operator Lifecell with service provider Datagroup-Volia, the investment firms involved in the deal said on Monday.

WHY IT IS IMPORTANT

Lifecell is Ukraine’s third-largest mobile provider after VEON (NASDAQ:VEON)’s Kyivstar and Vodafone (NASDAQ:VOD). The operator will merge with Datagroup-Volia, a fixed-telecom and pay-TV firm.

Lifecell was fully owned by Turkcell. In April, a Kyiv court cleared the path for the acquisition by lifting the seizure of Lifecell’s shares belonging to sanctioned Russian billionaire Mikhail Fridman, who held approximately a 20% stake through LetterOne.

KEY QUOTE

“The closing of this landmark transaction will serve as a signal to others that Ukraine offers compelling opportunities, and that the time to invest is now,” Niel said in a statement.

BY THE NUMBERS

The deal is worth at least $524.3 million, Turkcell said on Monday. The European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation will provide $435 million in loans, the firms added.

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

CONTEXT

NJJ Holding, the leading investor alongside Horizon Capital, is one of Niel’s investment vehicles. It is the sole owner of Atlas (NYSE:ATCO) Investissement, which is also the top shareholder of telecoms group Millicom.

Iliad, at the core of Niel’s overarching telco busines, will not be the parent company of this new Ukrainian provider, its CEO Thomas Reynaud told Reuters in August.

WHAT’S NEXT

The international player emerging from this merger may improve competition among convergent operators in Ukraine’s telecoms triopoly, Kyivstar’s CEO told Reuters on Thursday while the war with Russia weighs on mobile providers’ resiliency.