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A wind mobile storeSarah Dea/The Globe and Mail

The pending merger of two global telecom titans headquartered in Cairo and Amsterdam is being watched closely in Toronto, where embattled Wind Mobile stands to gain both financial security and operational heft.

VimpelCom Ltd. shareholders, at a special meeting in the Netherlands on Thursday, narrowly voted to approve the merger of the sprawling Russian carrier's Eastern European operations with the vast telecom assets of Egyptian billionaire Naguib Sawiris, Wind Telecom SpA. His Orascom Telecom Holding SAE financed Toronto-based startup Wind Mobile.

Since buying wireless licences with Orascom financing in 2008, Wind has had a roller-coaster ride of regulatory, legal and political turmoil (in May, its lawyers will be appealing a federal court decision on foreign ownership). Though Wind's troubles would not end with a merger of its financial backer, the deal would mean a sturdier financial foundation as the company battles on other fronts.

"It provides a lot of strength to Orascom," Anthony Lacavera, Wind's chairman, said in an interview. "We now have a stronger foreign strategic investor. And that's good news."

The $6.5-billion (U.S.) merger is between VimpelCom and Mr. Sawiris's Wind Telecom, which includes 51.7 per cent of Orascom and all of Italy's Wind Telecomunicazioni. The deal basically double VimpelCom's size, to more than 173-million mobile subscribers, and gives Mr. Sawiris about 30-per-cent control of the new entity.

The tie-up was far from a sure thing, however. One of VimpelCom's shareholders, the Telenor Group, spoke out against the deal. And the volatility of some of Mr. Sawiris's assets, notably in Algeria, were also potential hurdles to the deal.

Bay Street analysts said the merger is positive for Wind, since the sheer scale of the new entity would give the company more leverage when negotiating with mobile handset-makers and telecom equipment manufacturers.

Earlier, there was speculation that VimpelCom might divest "non-core" assets such as Wind, leaving the Toronto startup to fend on its own against large Canadian players such as Rogers Communications. Analysts, and Mr. Lacavera, noted that VimpelCom could have chosen to opt out of purchasing Orascom's stake in Wind Canada as it negotiated the deal.

"The combined entity has a much stronger balance sheet than... Orascom on a standalone basis, which in turn could ease funding challenges for Wind in Canada," wrote Canaccord Genuity analyst Dvai Ghose in a research note to clients.

Mr. Ghose added that Wind still faces significant challenges, notably the federal court ruling that the Conservative cabinet erred when it approved Wind's launch in December 2009, overturning an earlier rejection by federal regulators.

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