The deal signifies an attempt to end a long-running dispute between the two companies over the ownership of Turkcell.
The new company is to operate internationally with over 90 million subscribers in Russia, Turkey and other countries in the Caucasus region.
Plans call for further developing the operations at Turkcell and MegaFon as well as expanding into new emerging markets, according to a statement from TeliaSonera.
The new company will be the majority owner of both Turkcell and MegaFon, be based in a western country, and feature “well functioning corporate governance”, according to the statement.
TeliaSonera CEO Lars Nyberg hailed the deal as a an important step forward for both companies.
“I am very pleased that we have reached an agreement with Altimo to combine our efforts in resolving the legal disputes, which have been going on far too long,” he said in a statement.
“We have focused on creating a governance structure where all major parties will have good possibilities to influence, without single-handedly controlling, the management of the new telecommunications group. There is also very little risk of disruptive deadlock situations.”
At the heart of the dispute, which erupted in 2005, was a decision by Turkcell's previous majority owner, Cukurova , to sell the same Turkcell ownership shares twice, first to TeliaSonera, and then to Altimo.
TeliaSonera and Altimo have now vowed to “collaborate and align their efforts” to solve their respective disputes with Cukurova in order to ensure the creation of the new company.
“Such collaboration is expected to result in a speedy resolution of the disputes,” according to TeliaSonera.