Emerging Telecoms in $6.5 Billion Deal

Russian wireless operator VimpelCom Ltd. agreed to buy the telecommunication assets of Egyptian billionaire Naguib Sawiris in a $6.5 billion stock-and-cash deal, transforming two emerging-markets companies into a global giant.

VimpelCom is buying Mr. Sawiris's 52% stake in Orascom Telecom Holding SAE, a major wireless provider in the Arab world, and Italian carrier Wind Telecomunicazioni SpA. For VimpelCom, the deal doubles its number of subscribers to about 175 million, making it the world's fifth-largest mobile operator by that measure. One major roadblock is Orascom's Algerian unit, Djezzy, which the Algerian government has prevented from being sold in the past. Russian President Dmitry Medvedev and VimpelCom executives are flying to Algeria this week as part of an investment conference, and the company is expected to reiterate that foreign direct investment is in the interest of Algerian officials. The risks of problems in Algeria are already reflected in the stock price, and international treaties would prevent the state from nationalizing Orascom's assets there without paying a fair price, VimpelCom executives said.