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. Last Updated: 07/27/2016

Alfa Backs Vimpelcom-Megafon Tie-Up

Pyotr Aven, president of Alfa Bank, Russia's largest private bank, said Tuesday that he backed a merger between Vimpelcom and Megafon, the nation's No. 2 and No. 3 mobile operators, but that no decision had been made yet.

"It would be rational and reasonable to merge Vimpelcom and Megafon," Aven said. "However, the shareholders should make the final decision about this."

Some strategic shareholders in Megafon are vehemently against a merger.

The Anti-Monopoly Ministry earlier this month approved the acquisition of 25.1 percent of Megafon by Alfa-Eco, the telecom arm of the giant Alfa Group. Alfa Group also holds a 25 percent blocking stake in Vimpelcom, prompting speculation that the company would try to push through a Vimpelcom-Megafon tie-up.

Aven said that Alfa's only consideration in buying the Megafon stake was the company's profitability.

Megafon had 4.94 million subscribers as of Sept. 1, while Vimpelcom, which operates under the BeeLine brand name, had 8.53 million users.