Axiata and Telenor sign $ 15.8 billion deal to merge Malaysian telecommunications unit

Malaysian telecommunications company Axiata Group Bhd and Norwegian ASA has formed a new market leader in the highly competitive Southeast Asian country by signing an agreement to consolidate its mobile business in Malaysia with a $ 15.8 billion transaction.

TheĀ· In April, it was in preliminary talks to merge Celcom Axiata Bhd and DiGi.Com Bhd, and both parties said they would each own 33.1% of the merged company.

With the combination of the second and third largest mobile service providers in the country, Axiata estimates annual sales of $ 3 billion and core profitability of $ 1.4 billion from a base of approximately 19 million subscribers. Said in a statement.

Celcom Digi Berhad will continue to be listed in Kuala Lumpur in line with the preliminary agreement announced in April.

The implicit corporate transaction value is based on Digi’s share price of 4.18 ringgit as of Friday, according to sources familiar with the transaction.

This transaction occurs when mobile operators are facing profit pressure in a difficult industry environment. Celcom Digi’s main competitor is Maxis Bhd, the country’s largest carrier.

“Integrated entities are larger, commercially powerful and resilient for investing in improving network coverage and quality,” said Axiata. Said.

“(It) will also be on a larger scale that will allow us to drive 5G implementations in the consumer segment in the future,” Axiata said in a submission to the stock exchange.

The transaction, which requires regulation and other approvals, is expected to close by the second quarter of 2022.

As a result of the transaction Telenor said in a statement that it plans to cut costs and save capital investment so that its net present value is about $ 2 billion.

Axiata said it has signed a deal with Digi, which will transfer 100% of Celcom Axiata’s stake to Digi for a total consideration of RM17.76 billion ($ 4.3 billion).

Digi said the merger would allow Axiata to receive Digi’s newly issued shares and receive RM1.7 billion in cash consideration from Digi as new debt to the company after the merger.

“As part of Digi’s ownership leveling under the terms of the merger, Axiata will receive nearly RM300 million from Digi’s largest shareholder, Telenor,” he said in a statement.

Axiata said last Tuesday that it hopes to conclude a merger agreement within a few days or a week of completing due diligence.

Morgan Stanley was the only one Axiata’s adviser on the deal while Citi advises Telenor.

($ 1 = 4.1480 ringgit)

(Reported by Terje Solsvik in Oslo, Liz Lee in Kuala Lumpur, Anshuman Daga in Singapore, edited by Christopher Cushing, Stephen Coates, Emeria Sithole-Matarise)

(Only the headlines and photos in this report may have been reworked by Business Standard staff. The rest of the content is automatically generated from the syndicate feed.)

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Axiata and Telenor sign $ 15.8 billion deal to merge Malaysian telecommunications unit

Source link Axiata and Telenor sign $ 15.8 billion deal to merge Malaysian telecommunications unit

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