Russian operator MegaFon is to acquire VimpelCom’s 50% interest in electronics retail chain Euroset, ending the companies’ joint venture as each pursues its own retail strategy independently.
Euroset is Russia’s largest mobile and electronics retailer and had been co-owned by VimpelCom, the Russian subsidiary of Veon which trades under the Beeline brand in Russia, and MegaFon. As a result of the deal, MegaFon will take ownership of 100% of Euroset, which will continue to trade. VimpelCom will acquire half of Euroset’s retail stores to create its own network of Beeline branded stores.
Sergey Soldatenkov, the chief executive of MegaFon, said: “We are grateful to Veon for our partnership in retail over the last five years. The transaction will allow MegaFon and Veon to pursue their independent retail strategies and optimise mobile distribution in Russia. MegaFon will be able to improve quality of service for our clients. Euroset will remain and continue to evolve as a mobile retailer.”
Kjell Morten Johnsen, the chief executive of VimpelCom and the head of major markets at Veon, said: “The maturity of the Russian telecoms market is driving the operators’ retail focus from SIM card sales to retention and better services for existing customers, which requires operators to develop their own high-performing retail chains. The transaction reinforces VimpelCom’s monobrand strategy and will allow us to double our retail network in Russia. We look forward to welcoming customers to an even greater number of Beeline-branded stores."
The agreement, which is subject to regulatory approval, follows a deal in the US that saw mobile operator Sprint buy Dixons Carphone’s 50% share of their US retail joint venture.