Telenor "concerned" over VIP merger

Telenor, the Norwegian phone company that currently owns about 40% of Vimpelcom, is now “concerned” that the company’s pending merger will not go through.

Telenor (TELNY, quote) is worried that regulators in Bangladesh and Pakistan, where it already does business, will object if its affiliate VIP (quote) merges with Orascom Telecom (ORSTF, quote) as planned.

In fact, as far as the wireless markets in those two countries goes, TELNY and ORSTF are technically the only significant competitors, and so a merger could force one or the other to divest its interests.

Meanwhile, the Alfa Group, TELNY’s majority partner in Russia-based VIP, also seems to be getting cold feet on the merger due to the prospect that Algeria may take over ORSTF’s local wireless network Djezzy — arguably the crown jewel of the entire proposition.

Algiers is reportedly already hiring lawyers to look into whether it can nationalize Djezzy.

Since the current incarnation of VIP is the result of a long and sometimes fractious struggle between Alfa and TELNY, even the hint of agreement on this deal — which would dilute both their interests in the merged company — is noteworthy.

At this rate, VIP minority shareholders could get a reprieve from this unpopular merger and the stock can go back on its once-exciting upward trajectory.

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