Malaysia-based telecoms operator Axiata Group announced on Monday a merger with Norwegian telco Telenor for amount of $15.8 billion, in a bid to bring together their mobile operations under one roof within the country.
“The signing today signifies a confirmation of the intent to establish a commercially stronger and more resilient digital converged service provider, and leading Malaysian telecom operator positioned to drive Malaysia’s digital ambitions,” a joint statement by both companies said.
Earlier in April, the pair had reached advanced discussions to merge Celcom Axiata Group and DiGi.com Bhd, with both operators owning equal shares of 33.1 percent of the merger, which will then subsequently be listed on the Bursa Malaysia Securities Berhad; as they hope to become among the the five largest companies listed on Bursa in terms of market capitalization.
According to the pair, the new merged company will serve an estimated 19 million customers with annual revenue of almost $3 billion, with core profitability of $1.4 billion from subscribers.
“We are charting good progress in the ongoing merger exercise with Telenor and Digi and remain aligned in our intentions to deliver a strong value proposition that will enable our customers to participate more confidently as the nation transitions towards a digital economy,” Dato’ Izzaddin Idris, President & Group Chief Executive Officer of Axiata said.
According to both telcos, the newly formed company will see the combination of the scale, experience, competencies, and financial strength of both global telecom groups with the market knowledge of two well-established local companies.
“It will be well-placed to fuel the implementation of digital technologies at a time when 5G, IoT, AI and cloud computing are coming together to accelerate digitalization across all reaches of society,” the statement read.
In taking advantage of new opportunities in the digital economy, the Innovation Center will conduct extensive research and development, develop 5G use cases, support local digital startups, and provide a platform to nurture the creation of a knowledge-based workforce in line with the MyDIGITAL aspirations.
“The telecom industry is at the beginning of an exciting digital shift, and new technologies are going to change how we develop and deliver services for both the private and public sector. With this merger we bring together competencies, financial strength, and scale to go beyond connectivity and implement technology that further advances our customers digital experience,” says Jørgen A. Rostrup, Executive Vice President and Head of Asia in Telenor Group.
As stated in the initial announcement, Axiata and Telenor 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 MergeCo, which will be renamed to Celcom Digi Berhad subject to MergeCo’s shareholders’ approval.
Completion of the transaction will be subject to the approval of both Axiata and Digi shareholders, regulatory approvals and other customary terms and conditions. Barring unforeseen circumstances, the Proposed Merger is expected to be completed by the second quarter of 2022.