Norwegian telecom giant Telenor Group said on Thursday it was in advanced discussion with and Axiata Group Berhad regarding a potential merger of their Malaysian mobile operations Digi and Celcom.
The two companies were planning to hold equal ownership of 33.1 per cent each in the proposed merged company.
In a press release posted on its website, Telenor said the merged company would be named Celcom Digi Berhad.
“The proposed merger represents an important milestone in Telenor Group’s strategy to strengthen its Asian presence and create value in the region,” Jørgen C. Arentz Rostrup, Executive Vice President and Head of Telenor Asia, was quoted as saying in the press release.
“The new entity will have size and financial capabilities to support Malaysia’s digital aspirations and lead industry development in a connected society. We look forward to partner with Axiata to realise the potential of the new company,” he said.
Both parties have agreed to nominate Izzaddin Idris as Chair, Jørgen C. Arentz Rostrup as Deputy Chair, Idham Nawawi as Chief Executive Officer and Albern Murty as Deputy Chief Executive Officer of the merged company.
As part of the transaction, Axiata will receive newly issued shares in Digi which represents 33.1 per cent of the merged company, Telenor said.
A transaction will realise synergies and provide value for shareholders in line with our strategy of developing value from core telco assets, it added.
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 shareholder, receipt of regulatory approvals and other customary terms and conditions, according to the press release.
The press release also stated that 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.
Telenor and Axiata hold a large share in Bangladesh’s two top telecom operators Grameenphone and Robi respectively.
ri/am
