VEON and MegaFon to end their Euroset joint venture

Amsterdam and Moscow, 12 July 2017 - VEON Ltd., a leading global provider of telecommunications and digital services serving more than 235 million customers, and Public Joint Stock Company “MegaFon” (LSE: MFON), a leading Russian provider of integrated digital services ("MegaFon"), have agreed to end their Euroset joint venture.

Euroset is Russia’s largest mobile and electronics retail network and is co-owned by both PJSC VimpelCom, the Russian subsidiary of VEON, and MegaFon.

Based on the agreement reached between the parties, MegaFon will acquire PJSC VimpelCom’s 50% interest in Euroset, resulting in MegaFon owning 100% of Euroset, and PJSC VimpelCom will acquire half of Euroset’s retail stores.

Kjell Morten Johnsen, CEO of PJSC VimpelCom and Head of Major Markets at VEON Ltd., said :

"The maturity of the Russian telecom market is driving the operators' retail focus from Sim card sales to retention and better services for existing customers, which requires operators to develop their own high-performing retail chains. The transaction reinforces PJSC VimpelCom’s monobrand strategy and will allow us to double our retail network in Russia. We look forward to welcoming customers to an even greater number of Beeline-branded stores."

The agreement is subject to relevant regulatory approvals and other conditions precedent. The transaction will be completed only after such conditions precedent have been satisfied and regulatory approvals have been obtained.