VimpelCom and Global Telecom Holding (GTH), together with Warid Telecom Pakistan and Bank Alfalah (Dhabi Group shareholders), announced on Friday the completion of the transaction to merge Pakistan Mobile Communications Limited (Mobilink) and Warid Telecom (Warid) into a combined entity to serve over 50 million customers as Pakistan’s leading high-speed mobile network.
The combined Mobilink and Warid entity will be the leading telecommunications provider of 2G, 3G and LTE services in Pakistan.
Jean-Yves Charlier, Chief Executive Officer of VimpelCom, said “VimpelCom continues to make significant progress against its transformation programme. This market consolidation represents a further step in our strategy to strengthen our position in the markets in which we operate,” adding, “As the VimpelCom Group focuses on an ambitious digital transformation, we are investing in revolutionising our technology core and product portfolio. We look forward to bringing innovative new products and services to our customers in Pakistan.”
Chairman of Dhabi Group, Sheikh Nahayan Mabarak Al Nahayan, said: “I am very happy that we have arrived at this milestone today which marks a unique moment for the Pakistan telecom sector. It is very positive news for Pakistan’s economy.
He added: “I am confident that together, the combined businesses will continue to deliver excellence to their customers while contributing positively to the business environment in Pakistan.”
Mobilink and Warid will benefit from VimpelCom’s $1 billion investment into building one of the largest and most ambitious IT infrastructures in the industry.
The group’s new digital systems will enable faster roll-out of new local products and services, particularly in the areas of mobile communication and entertainment.
Chief Executive Officer Jeffrey Hedberg will hand over the CEO role of Mobilink and Warid to Aamir Ibrahim, currently Chief Commercial Officer and Deputy CEO of Mobilink.
The legal merger of the two companies, which will result in one merged legal entity having the same board, and management described above, is expected to be completed within approximately six months.
Mobilink and Warid will shortly file a petition to the Islamabad High Court in order to commence the process of legal merger.
As previously stated, the transaction is expected to create capex and opex synergies with a net present value of approximately $500 million with an annual run rate of well over $100 million of free cash flow improvements by year three.
The combined revenue of both companies for the 12 months to March 2016 was $1.4 billion.