Norwegian telecom giant Telenor and Russia’s Alfa Group ended their long-running battle over the control of wireless firms Vimplecom and Kyivstar on Monday with an agreement to merge the two carriers into a new company with an estimated value of US $23 billion. Vimplecom, Russia’s second-largest mobile operator, and Kyivstar, the largest cell phone company in the Ukraine, would be combined into a new entity, known as Vimplecom Ltd., which would be incorporated in Bermuda, headquartered in the Netherlands, and listed on the New York Stock Exchange. Together, Vimplecom and Kyivstar serve more than 86 million subscribers throughout Russia and the former Soviet republics, with both carriers posting combined 2008 revenues of $12.8 billion. Although Telenor and Alfa have long been partners, the companies have been embroiled in litigation for the past five years over Vimplecom’s expansion strategy. That dispute came to a head earlier this year as a Siberian court ordered the seizure of Telenor’s 30% stake in Vimplecom to recover $1.5 billion in court-ordered damages against the Norwegian company. Sources say that Monday’s agreement comes on the heels of high level talks between Telenor CEO Jon Frederik Baksaas and Russian prime minister Vladimir Putin, who, in recent weeks, has courted foreign investors as Russia continues to struggle with the effects of its worst economic downturn in a decade. The pact provides Altimo, a telecommunications subsidiary of Alfa, with a 43.89% stake in the combined entity. Telenor, meanwhile, would receive a 35.42% stake in the new Vimplecom. Current Vimplecom shares would be converted into shares of new company stock, and shareholders of Kyivstar would receive 3-4 shares of new Vimplecom stock for every Kyivstar share held. In addition to agreeing on a board structure (consisting of three Telenor directors, three Alfa directors, and three independent directors) that would avert future disputes, Telenor and Alfa have also pledged to settle all pending litigation with the goal of completing the transaction by mid-2010.