Turkcell inks deal to acquire 80% of BeST for USD500m

Turkish mobile operator Turkcell has announced the signing of a Sale and Purchase Agreement to buy an 80% stake in GSM operator Belarusian Telecommunications Network (BeST) from the State Committee on Property of the Republic of Belarus for USD500 million. The completion of the deal is subject to the terms and conditions of the sale agreement, the operator said. Payment will be made in three tranches, with USD300 million to be handed over on the closing of the deal - which is expected to happen 30 days after contracts are signed - and further payments of USD100 million to be made on 31 December 2009 and in 2010, respectively. PRNewswire reports that an additional USD100 million will be made when BeST records its first full-year profit.

In April this year, Turkcell reportedly agreed to buy a 75%-80% stake in BeST, with local press reports suggesting at the time that the transaction had been approved at 'the highest political level'. The state's decision to sell to the Turkish firm is seen as something of a blow to Russian mobile group Vimpelcom which had been hoping to enter the Belarusian mobile market. The Russian operator, which trades under the Beeline banner, had long been considered in the front seat to acquire BeST having tracked the cellco since its inception in 2004. BeST is the third largest mobile provider in Belarus behind MTS Belarus and Velcom, with around 195,000 customers at March 2008, a market share of less than 3%.

Commenting on the deal, Turkcell chief executive officer Sureyya Ciliv said: 'The acquisition of BeST represents an opportunity for Turkcell to gain access to a market with a growth potential. Belarus is an attractive emerging market within Turkcell's growth geography with its young and well educated population and steadily growing economy. We are also happy to be starting our operations with an already established third operator in Belarus. We believe we can use our complementary skills we gained in Ukraine and CIS very effectively in Belarus to differentiate BeST as soon as possible.'