VimpelCom said it will continue to explore deals that would add value to its Italian mobile unit Wind, but confirmed that discussions so far have failed to reach a successful conclusion.
Although the NASDAQ-listed company did not reveal the name of any companies involved in the discussions to date, it is widely believed that Hong Kong-based Hutchison Whampoa has been in talks with VimpelCom over a possible merger of Wind Italy with Three Italy since June.
"The company has held discussions to explore the potential value which would accrue to shareholders through a 50/50 joint venture in Italy. No conclusion to these discussions was reached," VimpelCom said in a statement to the U.S. Securities and Exchange Commission.
Sources told Reuters that talks between VimpelCom and Hutchison were still ongoing, but noted that "it's hard to put the Chinese and Russians together."
Bloomberg noted that a merger of Wind and Three Italy would create the largest mobile operator in Italy with 33 million subscribers and more than €6 billion ($7.6 billion) in combined annual revenue. That would put them ahead of current market leader Telecom Italia and create a market of just three players, with Vodafone Italy trailing in third place.
At present, Wind is the third-largest operator in Italy behind Telecom Italia and Vodafone Italy, while Three Italy is the smallest player on the market.
Consolidation talks in Italy have been ongoing for some time, but with little success. In 2013 Telecom Italia also ended talks with Hutchison Whampoa after the two failed to come to an agreement over combining their Italian mobile businesses. Hutchison has made it clear it wants to expand its footprint in the Italian mobile market, but a deal continues to elude the company.
Indeed, Hutchison Whampoa has been on a mission to build up its assets in Europe. The company has already acquired O2 Ireland and Orange Austria, and CCS Insight has also previously suggested that Hutchison could buy O2 UK.
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