25/12/2015 8:51 AM IST | Updated 29/08/2016 9:02 PM IST

Reliance Joins Hands With Russia's Sistema To Establish Telecommunications Company

An Indian shareholder walks past a Reliance display at the Annual General Meeting of Reliance Group Companies in Mumbai on September 30, 2015. AFP PHOTO/ INDRANIL MUKHERJEE (Photo credit should read INDRANIL MUKHERJEE/AFP/Getty Images)

MOSCOW -- India's Reliance Group and Russia's Sistema have signed an agreement to establish a joint telecommunications company.

According to TASS, Sistema's principal owner Vladimir Yevtushenkov said that his company has signed an agreement with Anil Ambani's Reliance Group to establish a joint venture.

On 2 November, Sistema signed binding documents on the merger of its Indian telecom business Sistema Shyam TeleServices (SSTL) and Reliance Communications, which is one of the largest telecom operators in India.

The two companies signed the agreement after Prime Minister Narendra Modi attended the CEO Forum in Moscow, during his two-day bilateral visit to the country for the sixteenth annual Summit.

The transaction implies that the telecom business is spun out from SSTL and merged with the business of Reliance Communications. SSTL share in the capital of the combined company will be 10 percent. The market capitalisation of Reliance is about USD 2.5 billion, so this share is estimated at USD 250 million. The transaction is expected to be closed in the second quarter of 2016.

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