New | Hutchison, Vimpelcom in Russia in talks over Italian joint venture

Russian telecoms group Vimpelcom is in talks with Asia’s Hutchison Whampoa about merging their mobile phone businesses in Italy as a joint venture, Vimpelcom Chief Executive Jean-Yves Charlier said on Wednesday.

"We are in discussions with Hutchison regarding a possible equal joint venture between 3 Italia SpA and Vimpelcom’s subsidiary WIND Telecommunicazioni SpA," Charlier said in comments sent to Reuters.

"There can be no assurances that an agreement will be signed and any transaction would be subject to, among other things, achieving satisfactory debt levels and obtaining all required corporate and regulatory approvals."

Combining Italy’s third-largest mobile network operator Wind with fourth-placed 3 Italia would cut the number of competing operators in Italy to three, as has already happened in Germany, Austria and Ireland, reducing competitive pressures and helping end a long price war.

The two sides have been in on-off talks for well over a year.

But hammering out terms has proven difficult given the interests of Asian tycoon Li Ka-shing, who controls Hutchison, and Vimpelcom’s controlling shareholder Russian billionaire Mikhail Fridman, whose LetterOne fund holds 47.9 per cent of Vimpelcom’s voting rights.