Telenor and Axiata in advanced talks to merge Malaysian operations
08 Apr 2021
Norwegian teleom operator Telenor Group and Malaysia’s Axiata Group Berhad are in advanced discussions regarding a potential merger of their Malaysian mobile operations Digi and Celcom, in which the parties will have an equal ownership of 33.1 per cent each.
The new company will be a leading provider of telecommunication services in the country, with competence and scale to meet increasing expectations and demand from a digitally connected society.
The parties aim to create a leading telecommunication service provider in Malaysia with the capabilities to drive research and innovation and facilitate a platform for accelerated digital growth in the local ecosystem and the merged company will be well positioned for delivering industry innovation, high-quality connectivity and a diversified value proposition to the customers, Teenor stated in a release.
“The proposed merger represents an important milestone in Telenor Group’s strategy to strengthen its Asian presence and create value in the region. The new entity will have size and financial capabilities to support Malaysia’s digital aspirations and lead industry development in a connected society. We look forward to partner with Axiata to realize the potential of the new company”, Jorgen C. Arentz Rostrup, executive vice president and head of Telenor Asia, said.
Both parties have agreed to nominate Dato’ Izzaddin Idris as chair, Jørgen C. Arentz Rostrup as deputy chair, Idham Nawawi as CEO and Albern Murty as deputy CEO of the merged company, which will be named Celcom Digi Berhad.
As part of the transaction, Axiata will receive newly issued shares in Digi, which represents 33.1 per cent of the merged company. a transaction will realise synergies and provide value for shareholders in line with our strategy of developing value from core telco assets.
Celcom Digi will continue to be listed on Bursa Malaysia and will be amongst the top stocks in terms of market capitalisation and contribute to the attractiveness of the local capital market.
Telenor Group and Axiata are looking to finalise agreements in relation to the proposed transaction within the second quarter of 2021 following due diligence.
The transaction will be subject to approval by Digi board and Celcom shareholders, receipt of regulatory approvals and other customary terms and conditions. The parties acknowledge that there is no certainty that these discussions will result in any agreement.
Telenor is reported to be looking at opportunities for mergers and acquisitions in several of its Asian markets, as well as in Denmark, to obtain the size and cost savings needed for digital investments.