Axiata Group Berhad and Telenor Asia are in advanced discussions on the merger of telecommunication operations of Celcom Axiata Berhad (Celcom) and Digi.com Berhad (Digi) in Malaysia, in which the parties will have equal ownership estimated at 33.1 per cent each, according to announcements made by Axiata Group Berhad and Telenor Asia.
Axiata together with Malaysian institutional funds will own over 51 per cent of MergeCo.
As part of the merger transaction, Axiata will receive newly issued shares in Digi representing 33.1 per cent post-transaction shareholding and cash equalisation of around RM 2 billion, of which RM 1.7 billion to come from Digi as new debt, balance of RM 300 million from Telenor.
Axiata has the right to nominate the initial chairman and chief executive officer of MergeCo, and together with Telenor, has agreed to nominate the following individuals to the key positions — Dato’ Izzaddin Idris as chairman, Jorgen C Arentz Rostrup as vice-chairman, Idham Nawawi as chief executive officer and Albern Murty as deputy chief executive officer.
MergeCo will be named Celcom Digi Berhad and will continue to be listed on Bursa Malaysia.
Both parties will work towards finalising agreements in relation to the proposed transaction within the second quarter of 2021.
The transaction will be subject to approval by Celcom and Digi shareholders, receipt of regulatory approvals and other customary terms and conditions.
Axiata president and group chief executive officer Dato’ Izzaddin Idris said, ‘As a commercially stronger and more resilient entity, Celcom Digi Berhad will help restore long-term growth and capacity to the industry, especially in terms of improved profitability. We will be well placed to further invest in research and innovation, and to improve our customer experience.’
‘The proposed merger represents an important milestone in Telenor Group’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. We look forward to partner with Axiata to realise the potential of the new company,’ said Jorgen C Arentz Rostrup, executive vice-president and head of Telenor Asia.
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