OREANDA-NEWS. The national telecoms market has seen a landmark deal. Rinat Akhmetov's SCM Group and Austrian EPIC signed a share sale agreement for 100% stake in Cyprus-based UA Telecominvest Limited, which indirectly owns 92.79% in Ukrtelecom.

Therefore, Ukraine's number one fixed-line provider will come under the umbrella of the largest financial and industrial group in the country.

SCM stated that acquisition of Ukrtelecom is a promising investment project in the telecoms industry. "Using our expertise in telecoms and the synergy with other telecom businesses within the group, we are happy to offer new services to current subscribers, attract new users and build a modern infrastructure in Ukraine," stated Ilya Arkhipov, SCM Advisors Managing Director.

EPIC, which became the controlling shareholder of Ukrtelecom in 2011 in a privatisation tender (the deal's value was UAH 10.575bn), shows openly their satisfaction with the signed agreement. EPIC Managing Partner Peter Goldscheider said that possible large-scale restructuring and commercial reasons were the key drivers for the company to enter into the deal.

For SCM, Ukrtelecom's acquisition looks like a very logical step. Rinat Akhmetov's company have been long investing in telecoms, developing fixed-line communications and broadband access (Vega Telecommunications Group) as well as mobile connections (Astelit owned jointly with Turkcell).

Ukrtelecom operates in all these segments: it is a the leader of fixed-line market (9.4 million subscribers) and broadband access (over 1.5 million subscribers).

Finally, the company owns TriMob, Ukraine's only 3G provider with 800,000 users. After the deal is closed, SCM will at once take the lead in several telecoms market segments.

The company has already confirmed its commitment to investing in Ukrtelecom. "We can focus on its development and have all necessary resources," said Ilya Arkhipov.

He stated that Ukrtelecom and Vega could jointly develop and operate the backbone network and access network. Moreover, 3G development will be another priority (today TriMob covers only 35% of population). This move can be done in partnership with other mobile operators.

Ukrtelecom and TriMob are likely to see management reshuffle after the acquisition is completed to streamline their processes and fully implement the strategy of the new investor.

The stock market had a positive response to the deal between SCM and EPIC: Ukrtelecom's shares soared more than 20% after disclosure of the information. Investors viewed the deal favourably as well.

SP Advisors CEO Nick Piazza said that SCM Group pursues the western management principles and has a strong reputation among foreign investors.

"Ukrtelecom's ownership structure is also becoming more transparent, thus improving relations with investors and creditors," he noted. Aleksandr Parashchiy, head of analytical department of Concorde Capital Investment Company, believes that after the acquisition telecoms will become a core business for Rinat Akhmetov's group and SCM will have more grounds to invest in it.