The new company would be called Celcom Digi
By: Tricia Ang | 13 April 2021
Axiata Group and Norway’s Telenor ASA, Malaysian telecoms firms, are currently in advanced talks to merge their mobile operations in Malaysia.
Both companies stated that they were discussing the merger of the telco operations of Celcom Axiata Berhad and Digi.Com, in which the parties would have equal ownership estimated at 33.1% each.
The other shares goes to Malaysian institutional investors, who would own at least 17.9% of the shares in the new company and ensuring that the overall local ownership exceeded 51 per cent, Axiata said.
The company would be called Celcom Digi.
Reuters reported earlier on Thursday that Axiata and Telenor were set to announce a deal involving the Malaysian mobile operations of both firms.
As part of the deal, Axiata is set to receive newly issued shares in Digi, a cash consideration from new debt in the merged company of about US$400 million and a further US$70 million from Telenor Group, according to Telenor.
“A transaction will realise synergies and provide value for shareholders in line with our strategy of further developing Telenor’s Asian portfolio,” Telenor said in a statement.
Telenor, the Norwegian company, is the largest shareholder in Digi, operates in other Asian countries such as Thailand, Bangladesh, Myanmar and Pakistan.
Axiata said the merged company aimed to be “a leading telecommunications service provider in Malaysia in terms of value, revenue and profit”, and was expected to have proforma revenue of about RM12.4 billion (S$4.02 billion).
It was expected to have earnings before interest, taxes, depreciation and amortisation of about RM5.7 billion, and an estimated 19 million customers.
Trading in shares of Digi and Axiata was suspended earlier in the day pending the announcement.
In September 2019, Telenor and Axiata called off a proposed deal to create a telecoms joint venture with nearly 300 million customers across South and South-east Asia, blaming “complexities”.
And last year Telenor said it was combining its Asian operations into a single entity under new leadership to be better placed to pursue deals in the region.
Digi is Malaysia’s second largest mobile services provider by subscribers, while Axiata’s domestic unit Celcom, is the third largest.