Rostelecom acquires LUKOILs telecommunication arm

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Moscow, Russia – November 12, 2020 Rostelecom Group (MOEX: RTKM, RTKMP; OTCQX: ROSYY), the largest integrated digital service provider in Russia, today announces that it has signed a legally binding agreements to acquire 50.1% LUKOIL INFORM, the telecommunication business of LUKOIL one of the largest vertically integrated oil and gas companies in the world. Under the agreements, at the time of signing, Rostelecom will acquire 50.1% shares in the company, with call/put options to increase Rostelecom’s participation to 100% in 2023. The total deal value will depend on LUKOIL-INFORMs financial performance and will amount to no less than RUB 2 billion, including the exercising the call/put options.

LUKOIL-INFORM operates the telecommunication infrastructure for oil and gas exploration, production, processing, marketing and distribution across all LUKOILs branches in 53 regions in Russia. In line with the agreement, LUKOIL will retain the existing contractual commitments for LUKOIL-INFORM over the next five years. The deal will further solidify Rostelecoms B2B offering through the formation of a competence center for digital development in oil and gas sector. This in turn will open up further opportunities to promote Rostelecoms comprehensive digital services across LUKOILs wider corporate footprint.

Anna Shumeiko, Senior Vice-President, the Chief of Staff of the President of Rostelecom:
“The acquisition of LUKOILs telecommunications business will strengthen our proposition for corporates. The wider synergy effects of this fusion will yield new opportunities for collaboration with the largest oil and gas major, including in the area of IoT technologies. We have already started to explore new innovation projects and are looking forward to learning from colleagues at LUKOIL to further strengthen our digital skills that the oil and gas sector will benefit from”.

Vladimir Kirienko, First Vice-President of Rostelecom:
The ongoing digital transformation and the growing demand for cloud coming from large industrial companies in the past few years, prompts them to hand over telecommunications divisions to communication operators. This trend has proved efficient both commercially and technologically, as companies dont need to invest in setting up large scale IT infrastructures and can rely on operators ecosystems. The collaboration with LUKOIL will enable us to optimise and expand the range of services for the entire group, and going forward, build up our own competencies and enhance the digital offering for continuous processing industries.

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