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Telenor and Altimo to Create a Leading Emerging Markets Mobile Operator

(OSLO/MOSCOW 5 October 2009) Telenor Group and Altimo (the telecom arm of the Alfa Group) announce an agreement to combine their common assets in VimpelCom and Kyivstar to create a leading emerging markets mobile operator.

The parties have reached an agreement to combine their holdings in OJSC VimpelCom and Kyivstar into a new jointly-owned mobile telecoms operator, VimpelCom Ltd. The united company will provide high-quality integrated mobile telecom services in Russia, Ukraine and other CIS countries, as well as Georgia, Vietnam, Cambodia and Laos. VimpelCom Ltd. will seek to expand its operations in other rapidly developing markets in Europe, Asia and Africa, becoming one of the world’s leading players in the industry.

VimpelCom Ltd. is incorporated in Bermuda, will be headquartered in the Netherlands and will be listed on the NYSE.

Key benefits of the proposed transaction include the following:

Establish a leading emerging markets mobile operator with significant in-market and international growth opportunities;
Participation in the value creation from common management of the combined assets;
Attractive dividend potential from cash-generative Russian and Ukrainian operations;
Alignment of Telenor and Altimo’s interests going forward in Russia and Ukraine in a listed entity; and
Resolution of all outstanding disputes between Telenor and Altimo.

The parties have agreed to suspend all their ongoing legal proceedings and take action to withdraw or settle them prior to the transaction being completed. The governance structure agreed for VimpelCom Ltd. is designed to significantly reduce the potential for new disputes between the shareholders.

Jon Fredrik Baksaas, President and CEO of Telenor Group, said:

“Telenor is proud to take part in creating one of the most competitive and important players in the world of mobile communication. VimpelCom Ltd. will have ample opportunities for future growth and value creation for the benefit of all shareholders. We have turned a five-year struggle into an exciting venture for the future, and are pleased to announce an agreement that will enable us to focus completely on the long term value creation opportunity of the new company and put all previous disagreements behind us. We strongly urge all other OJSC VimpelCom shareholders to support the proposed transaction and join us in forming VimpelCom Ltd.”

Alexei Reznikovich, CEO of Altimo, said:

“Today is a truly historic day for our companies. We witness the appearance of a new star in the global telecom space. Altimo and Telenor have joined together to create a true leader in the telecoms market in the interests of all shareholders and subscribers. The new company will have unparalleled experience in providing modern telecoms solutions in strongly competitive environments. Moreover, the new company will be strong financially and therefore much more attractive to investors all around the globe who are looking for stable investment opportunities. We are confident that this merger will substantially increase shareholder value of the new company.”