VimpelCom Ltd. (VIP:US) and Pakistan Telecommunication Co. have abandoned talks to buy mobile operator Warid Telecom, two people familiar with the matter said.
The companies dropped out of the negotiations with Warid’s owners, privately-held Abu Dhabi Group, after failing to agree on a price, according to the people, who asked not to be identified because details of the talks are private. Abu Dhabi Group put Pakistan’s Warid up for sale last year in a transaction worth as much as $1 billion, the people said.
Amsterdam-based VimpelCom and Pakistan Telecommunication, part-owned by Abu Dhabi-based Emirates Telecommunications Corp. (ETISALAT), or Etisalat, held talks to buy the business as they sought to consolidate their existing operations in the south-Asian country, the people said.
Pakistan’s mobile telecommunications industry has five operators and increased competition has put pressure on margins. VimpelCom’s unit, which in the country operates under the name Mobilink, has the most subscribers. Other operators are China Mobile Ltd. and Oslo-based Telenor ASA. (TEL) Warid started its cellular services in Pakistan in May 2005 and has more than 12 million subscribers.
Abu Dhabi Group said in an e-mailed statement that talks with Pakistan Telecommunication were called off “since an agreement couldn’t be reached on the desired valuation for the company.” It didn’t mention negotiations with VimpelCom.
VimpelCom Chief Executive Officer Jo Lunder declined to comment on Warid negotiations when asked on March 6, saying the company was looking for consolidation opportunities in Pakistan. A spokesman for Etisalat also declined to comment, while a spokesman for Pakistan Telecom wasn’t immediately able to comment.
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