Kyiv Court Ruling Clears Path for French Acquisition of Lifecell

A Kyiv court lifts seizure of Lifecell shares owned by a sanctioned Russian oligarch, paving the way for a French billionaire's acquisition of the Ukrainian mobile operator. This merger could create a stronger player in the telecoms market.

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Salman Akhtar
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Kyiv Court Ruling Clears Path for French Acquisition of Lifecell

Kyiv Court Ruling Clears Path for French Acquisition of Lifecell

A Kyiv court has ruled to cancel the seizure of Lifecell shares owned by sanctioned Russian oligarch Mikhail Fridman, removing a key obstacle to French billionaire Xavier Niel's planned acquisition of the Ukrainian mobile operator. The court's decision, announced on April 16, 2024, paves the way for Niel's investment company NJJ to proceed with the purchase of Lifecell as part of a broader merger with telecoms company Datagroup-Volia.

NJJ has already received regulatory approval from Ukraine's antitrust regulator to acquire Datagroup-Volia, one of the country's largest fixed telecom and pay-TV providers. While still awaiting final approval to acquire Lifecell, the court ruling marks a crucial milestone in the acquisition process. Lifecell is currently 100% owned by Turkcell, a publicly traded company in which Fridman's investment management firm LetterOne indirectly holds a 19.8% stake.

Ukraine had previously frozen Fridman's Turkcell shares in October 2023, citing his support for Russia's invasion of the country. However, the sale contract for Lifecell explicitly prohibits any payment to Fridman, and all parties involved are legally bound to comply with international and Ukrainian law, including current sanctions. Mykhailo Shelemba, CEO of Datagroup-Volia, emphasized that the transaction documents ensure no proceeds from the sale will be transferred to Fridman or companies under his control.

If the acquisition receives final regulatory approval, NJJ will purchase 100% of Turkcell's Ukrainian businesses for a total value of $1.5 billion, including the purchase price and investments over the course of five years. Once complete, Lifecell will be merged with Datagroup-Volia to form a combined entity. The proceeds from the sale are expected to be used to finance capital expenditures and debt obligations in Turkcell's main market in Türkiye.

The court ruling and potential acquisition of Lifecell by a French investor mark a significant development in Ukraine's telecoms sector amid the ongoing challenges posed by Russia's invasion. The merger of Lifecell with Datagroup-Volia could create a stronger player in the market, combining mobile and fixed-line services. However, the deal still hinges on final regulatory approvals and the successful management of complex sanctions-related issues tied to Fridman's indirect ownership stake in Turkcell.

Key Takeaways

  • Kyiv court cancels seizure of Lifecell shares owned by Russian oligarch Mikhail Fridman.
  • Paves way for French billionaire Xavier Niel's NJJ to acquire Ukrainian mobile operator Lifecell.
  • NJJ already received approval to acquire Datagroup-Volia, a major fixed telecom and pay-TV provider.
  • Lifecell sale contract prohibits any payment to Fridman, complying with sanctions laws.
  • Merger of Lifecell and Datagroup-Volia could create a stronger player in Ukraine's telecoms sector.