Vimpelcom, part owned by Russia's Alfa Group and part by Norway's Telenor, is set to unveil a $6.5 billion deal to buy control of Egypt's Orascom Telecom and Italy's Wind, sources said on Monday, a move that could create the world's fifth-largest mobile operator.
Analysts said the plan may yet crumble due to uncertainty over whether Orascom's Algerian unit Djezzy, its biggest single source of revenue, would be included.
Algiers, which had rejected Orascom's plans to sell Djezzy to South Africa's MTN, is trying to nationalise the unit and is expected to make an offer in the coming months.
"We continue to see the complexity of the deal as an obstacle to its completion. It is not clear to us why Algeria would halt the process of buying out Orascom Telecom Algeria," Credit Suisse analyst Richard Barker wrote in a note.
If finalised, the deal would help Orascom's holding company lighten its debt burden and become a player in the one of world's top five telecoms firms, a goal its Egyptian tycoon owner, Naguib Sawiris, has talked about since 2006.
The acquisition would mark a major expansion into Asia, North Africa and the developed European market, for Vimplecom, which is part controlled by Russian billionaire Mikhail Fridman.
Vimpelcom's chief executive Alexander Izosimov told Reuters last month that now was a good time for the emerging markets specialist to expand into developed markets -- which could include Italy -- to target data services growth.
He added the entire telecoms sector was undervalued, making acquisitions "more relevant than ever".
Sources familiar with the issue told Reuters the planned deal was worth a potential $6.5bn, comprising cash and 20 per cent of Vimpelcom's shares.
Trading in Orascom was suspended on Monday after speculation of the tie-up drove its shares up 4.8 percent on Sunday, and traders said they expected more gains.