TeliaSonera, which has 37% of Turkcell, announced in March it had reached an agreement with shareholder Turkish Cukurova Group - a member of the telecommunications consortium of Ericsson, Finland Telecom - to acquire a further 27% stake, hereby gaining control. But TeliaSonera's deal was overtaken by the offer from Alfa, and the Norwegian company claimed in a statement yesterday that Alfa's actions had directly made Cukurova breach the March agreement.
The $3.3 billion deal with Cukurova includes the direct purchase of 49% of Cukurova Telecom Holding which indirectly owns 51% of Turkcell for $1.6bn plus a six-year $1.7bn loan. This plan potentially gives Alfa the opportunity to obtain control over the Turkish company in the event Cukurova does not honor the loan.
Following the deal, TeliaSonera will hold 37% of Turkcell, Cukurova will hold 13% directly and 14% indirectly and Alfa will also have 13%.
In addition to gaining a stronghold in the lucrative $10 billion Turkish cellular market (which is also the aim of competitor MTS' plan to bid for the country's No.2 operator, Telsim), Alfa has another motivation for entering this deal. Alfa is fighting for a 25% stake in Russia's third largest mobile phone operator Megafon, in which TeliaSonera owns a 36% stake, and Alfa is now positioned to negotiate a possible switch of its stake in Turkcell for TeliaSonera's stake in Megafon.
