Telenor Group and Axiata Group closed-in on a deal to merge their Malaysian mobile operations Digi and Celcom, with a proposal to see each taking a 33.1 per cent stake in the new entity.
The companies stated talks are at an advanced stage and a deal could be closed this quarter, following due diligence. The transaction will be subject to approval by the Digi board, Celcom shareholders and regulators.
Telenor EVP and head of Asia Jorgen Arentz Rostrup said the proposed merger would be an important milestone in the operator’s strategy to strengthen its Asian presence and create value in the region.
“The new entity will have size and financial capabilities to support Malaysia’s digital aspirations and lead industry development in a connected society.”
Axiata president and CEO Izzaddin Idris said: “As a commercially stronger and more resilient entity, Celcom Digi will help restore long term growth and capacity to the industry, especially in terms of improved profitability.”
As part of the transaction, Axiata will receive newly issued shares in Digi representing 33.1 per cent post-transaction shareholding and a cash equalisation amount of around MYR2 billion ($483.5 million), of which MYR1.7 billion will come from Digi as new debt with the remainder from Telenor.
Axiata and Malaysian institutional funds will own more than 51 per cent of the merged company Celcom Digi, which will be listed on the Malaysian stock exchange.
The operators nominated Idris to chair the merged business, with Rostrup as deputy, Celcom chief Idham Nawawi as CEO and Digi CEO Albern Murty as deputy chief.
Axiata and Telenor previously explored merger options in 2019.Subscribe to our daily newsletter Back