Telenor, Axiata to merge Malaysian operations

The parent companies of two leading Bangladeshi mobile phone operators, Grameenphone and Robi, are in talks to merge their operations in Malaysia.

Telenor Group and Axiata Group Berhad are in advanced discussion on a potential merger of its Malaysian mobile operations Celcom and Digi, where both parties will have equal ownership of 33.1 percent each, according to a press release.

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.

A progressive digital economy is important to Malaysia’s future economic resilience and competitiveness and the merged company will be well-positioned for delivering industry innovation, high-quality connectivity and a diversified value proposition to the customers, the press release said.

“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 the size and financial capabilities to support Malaysia’s digital aspirations and lead industry development in a connected society,” Executive Vice President and Head of Telenor Asia Jørgen C Arentz Rostrup said.

Both parties have agreed to nominate Dato’ Izzaddin Idris as the 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 percent of the merged company.

The press release also mentions that the transaction will realise synergies and provide value for shareholders in line with the 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 will work towards finalising 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.

In Bangladesh, Axiata went into a merger deal with Bharti Airtel back in 2016. The merger fee was Tk100 crore and the spectrum charge was around Tk348 crore.

With that merger, Axiata holds 68.7% controlling stake in the entity while Airtel holds the remaining 31.3%.