AIG invests in Romanian telecoms business

AIG Capital Partners, an emerging markets private equity specialist, has bought a 42 percent stake in a Romanian telecoms business for €45 million. It is the firm’s latest investment in what has become an attractive destination for private equity.

AIG Capital Partners has invested €45 million in Romania’s Digital Cable Systems (DCS) for a 42 percent stake. DCS is Romania’s third biggest provider of video re-transmission services.


The investment comes out of AIG’s New Europe Fund II, which closed in March 2007 on €523 million and is dedicated to investments in central and eastern Europe. The fund’s predecessor, the AIG New Europe Fund, closed in 1999 on $321 million. The central and eastern Europe team is headed by Pierre Mellinger and has offices in Warsaw, Bucharest and Budapest.


The telecoms sector has long been the biggest source of deals for private equity firms in central and eastern Europe. Mid Europa Partners and GMT Communication Partners recently sold Invitel, Hungary’s second biggest fixed line telecoms operator, to Hungarian Telephone & Cable for €470 million.


AIG’s previous investments in Romania’s telecoms sector include Orange Romania, the country’s biggest mobile phone operator. AIG and a consortium bought a 20 percent stake in the business in 1999 and made a four times return on the original investment when the company was sold to France Télécom in 2005.


AIG Capital Partners is the private equity business of AIG Global Investment Group, which manages more than $687 million in assets.