Ucom tries to block Team’s acquisition of Veon Armenia

Ucom tries to block Team’s acquisition of Veon Armenia
A Beeline shop in the Armenian capital Yerevan.
By bne IntelliNews July 8, 2020

Armenian telco Ucom is seeking to block an attempt by rival Team set up earlier this year by two former Ucom executives to buy Veon Armenia, which operates under the Beeline brand. 

Former Ucom director-general Hayk Yesayan and former deputy director and strategic director Alexander Yesayan quit in April. At the time, RFE/RL reported that the brothers were unhappy the deal would dilute their 6% shareholding in Ucom. 

They then went on to found Team and entered into talks with Veon that resulted in a deal under which Team would acquire 100% of Veon Armenia. 

Team asked the State Commission of the Protection of Economic Competition (SCPEC) to approve the deal in June. Ucom said in a statement published on its website that on June 26 the SCPEC had approached Ucom to clarify its position on the deal. Ucom then called on the competition authority to reject the deal. 

Ucom argued that it was unfair competition, saying that Team’s management had used undisclosed confidential information. It accuses the Yesayans of breaching their fiduciary duty towards Ucom by using confidential information when negotiating the deal with VEON Armenia. 

“[W]e find that as a result of the revelations and use of confidential information belonging to Ucom by the Yesayans, Team LLC was able to negotiate and sign a memorandum within just a month, and is going to acquire the shares of Veon Armenia CJSC, while similar deals’ negotiations last for months, if not longer. These actions … are both unfair competition and prohibited,” the statement said. 

Ucom said it was intending to “defend its violated rights” both in Armenia and abroad, and is currently discussing possible international legal proceedings with its legal advisers. 

 

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