Malaysian telco Axiata Group and Norway's Telenor agree on US$15b merger

Business | 21 Jun 2021 4:48 pm

Malaysian telecoms firm Axiata Group Bhd and Norway's Telenor ASA sealed an agreement to merge their mobile operations in Malaysia in a US$15 billion deal, forming a new market leader in the country, Reuters reports.

The companies had said in April that they were in advanced talks to merge Celcom Axiata Bhd and DiGi.Com Bhd, and both parties would each own 33.1 percent of the merged firm.

The combination of the country's second and third largest mobile services providers will create a company estimated to have annual revenue of US$3 billion, with core profitability of US$1.4 billion from a subscriber base of about 19 million, Axiata and Telenor said in a statement.

Celcom Digi Berhad will remain listed in Kuala Lumpur, in line with a preliminary agreement announced in April.

The implied enterprise deal value is based on Digi's share price of 4.18 ringgit as of Friday, a source familiar with the deal said.

The deal comes at a time when mobile operators are facing pressure on profits in a challenging industry environment.

Celcom Digi's main competitor would be the largest telecoms operator in the country, Maxis Bhd.

"The merged entity will be commercially stronger and more resilient with greater scale to invest in improved network coverage and quality," Axiata and Telenor said. "(It) will also have greater scale which will allow it to drive 5G implementation in the consumer segment in the future," Axiata said in a stock exchange filing.


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