Axiata, Norway’s Telenor in advanced discussions to merge Malaysian telco units
The Axiata headquarters building is seen in Kuala Lumpur May 28, 2014. REUTERS/Samsul Said/Files
April 8, 2021
Axiata Group Bhd and Norway’s Telenor Group are in advanced discussions to merge their Malaysian telecom operations to create the largest mobile operator in the country.
The companies seek to combine Celcom Axiata Bhd and Digi.com to form Celcom Digi, in which they will have equal ownership of 33.1% each, Axiata said in a statement on Thursday. The combined entity will continue to be listed on Bursa Malaysia.
As part of the proposed transaction, Axiata will receive newly issued shares in Digi and a cash consideration of around 2 billion ringgit ($483.56 million), of which 1.7 billion ringgit will come from Digi as new debt and the rest from Telenor, the Malaysian firm said.
Telenor, Axiata in advanced discussions to merge Malaysian operations Star Business Report Star Business Report
Telenor Group and Axiata Group Berhad are in advanced discussions about a potential merger of their Malaysian mobile operations Digi and Celcom, Telenor said today.
The merged company will be named Celcom Digi Berhad, the Norwegian company said in a press release. Telenor Group and Axiata will work towards finalising agreements in relation to the proposed transaction within the second quarter of 2021 following due diligence.
Both parties will have equal ownership of 33.1 per cent each in the new company, which is expected to be a leading provider of telecommunication services in the Southeast Asian country, with competence and scale to meet increasing expectations and demand from a digitally connected society.
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KUALA LUMPUR (Reuters) -Malaysian telecoms company Axiata Group Bhd and Norway’s Telenor ASA are nearing a deal to combine their Malaysian mobile operations to create the country’s top player in the highly competitive sector.
A woman walks past the Axiata headquarters building in Kuala Lumpur, Malaysia, October 1, 2019. REUTERS/Lim Huey Teng/File Photo
The companies said on Thursday they were in advanced talks to merge Celcom Axiata Bhd and DiGi.Com Bhd, in which the parties would each own about 33.1%.
“It is no secret that the telecommunications industry continues to face long-term structural headwinds of slower growth, increased operating costs and lower profits,” Axiata’s CEO Izzaddin Idris said in a statement.
News Analysis Robert Clark 4/8/2021
Axiata and Telenor are close to agreeing a merger of their Malaysian operations, the two companies have announced.
The combination of Axiata subsidiary Celcom and Telenor s Digi would create Malaysia s largest mobile operator, with proforma revenue of about RM12.4 billion (US$3.0 billion), EBITDA of RM5.7 billion ($1.37 billion) and an estimated 19 million customers.
Axiata said in a statement the two firms were in advanced discussions over the merger. Axiata s trading on the Malaysia Bursa was suspended ahead of the announcement.
The deal revisits the attempted $13 billion merger between Axiata and Telenor s Asian operations in 2019, abandoned because of Indonesian opposition and Malaysian sensitivities over ceding control to the Norwegian firm.
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Barring a last minute switch in plans, Malaysia could soon see the birth of a new telco behemoth. Various news outlets have stated that a merger between Celcom and Digi – two of the nation s biggest telecommunications service providers – will soon take place.
This merger follows strong rumours that revealed ongoing discussions between parent companies Axiata Group and Telenor Asia to combine their subsidiaries into a single entity, with talks already at an advanced stage .
Celcom s parent company Axiata Group Berhad, which now serves multiple emerging markets in Asia, was previously a company under the purview of Telekom Malaysia – the country s largest provider of broadband services as well as other fixed-line network products.