Mobile TeleSystems in $1.3 Billion Acquisition of 51% of Comstar-UTS

Cleary Gottlieb is representing Mobile TeleSystems (MTS), and the Special Committee of its Board of Directors which is made up of the board’s three independent directors, in the contemplated $1.3 billion acquisition of 51% of Comstar-UTS by an MTS subsidiary from Sistema, MTS’ majority shareholder. On August 5, the Special Committee recommended the terms of the acquisition to the MTS Board, and the MTS and Sistema Boards both approved the transaction.

MTS is the largest mobile phone operator in Russia and the CIS and is listed in New York and Moscow. Sistema is the largest public diversified financial corporation in Russia and the CIS and is listed in London and Moscow. Comstar is a fixed line telephone and broadband operator in Russia listed in London and Moscow. All three are Russian companies.

Completion of the acquisition is subject to financing, receipt of regulatory approvals, the approval of Sistema shareholders and other conditions. Execution of the share purchase agreement and completion are scheduled for the end of October.