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. Last Updated: 07/27/2016

Golden Stake for Telenor

OSLO, Norway -- Norwegian telecoms firm Telenor said Wednesday that it had agreed to swap its Moscow unit Comincom for a stake in Russian fixed-line operator Golden Telecom, giving Golden a lead in Russia's richest city.

Analysts said the deal -- neutral to the firms' shares -- would reduce stiff competition in Russia's narrow market for fixed-line services by helping Golden grab the biggest share of the lucrative Moscow market.

The transaction, subject to approval by U.S. and Russian regulatory bodies and by Golden Telecom shareholders, would tighten Telenor's ties to its powerful Russian partner Alfa Group, which has 31 percent in Golden Telecom.

Telenor and Alfa Group together own Russia's No. 2 mobile operator Vimpelcom.

"Whether this [cooperation with Alfa Group] will be developed further is too early to say," Melgaard said.

Under the agreement, Golden Telecom would get 100 percent of the shares in Comincom, including its Combellga unit -- a Golden Telecom rival -- while Telenor would get 19.5 percent of the shares in Golden Telecom, Telenor said.

"The price [of the deal] seems adequate. Golden Telecom will now be about 30 percent bigger," said Alexei Yakovitsky, a telecom analyst at leading brokerage UFG.

"Combellga has a rather good regional network and it will help Golden Telecom implement its program to expand in the regions," he said.

Comincom-Combellga is Golden Telecom's second-largest rival for premium telecoms services in Moscow after city fixed-line operator MGTS.