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AIG to buy Bulgaria's Telco BTC

US insurer AIG has acquired a majority stake in the Balkan country's dominant telecom firm BTC, the company announced on Thursday.

Icelandic tycoon Thor Bjorgolfsson's investment vehicle Novator has agreed to sell his 65% option in BTC to AIG Global Investment Group (AIGGIG) for €1.08 billion ($1.47 billion) bringing the total value of BTC to €1.66 billion. „The acquisition is believed to be the biggest private M&A transaction in Bulgaria to date,” BTC said in a filing to the Bulgarian Stock Exchange. Bjorgolfsson's call option in BTC gives him the right to buy a 65% stake in the company acquired by private equity firm Advent International through its investment arm Viva Ventures in a 2004 privatization. In winning the deal AIGGIG, through its private equity firm AIG Capital Partners, beat rival suitors Saudi Oger Telecom and Turkish mobile phone operator Turkcell. It also outbid US private equity fund Mid Europa Partners and a consortium of US private equity firms Texas Pacific Group and Warburg Pincus.

AIGGIG, which manages more than $687 billion in assets, is expected to acquire another 25% in BTC as part of the agreement shortly, BTC said. The new owner will exercise the option on or after June 11, when the three-year ban on selling the controlling package expires. The deal is subject to the approval of the regulatory and competition authorities. After the transaction is completed AIGGIG will launch an offer for the remaining shares in BTC. Bulgaria has one of the highest fixed-line telephone penetration rate in Central and Eastern Europe - approximately 85% of all households have a telephone. (novinite.com, reuters.com)