Following rumours, Axiata and Telenor have today announced that they are nearing a deal to combine their Malaysian mobile units
Details have today been shared of a plan to merger Telenor and Axiata’s Malaysian mobile units in a move which would create the country’s largest mobile operator. If combined, the newly merged entity would garner annual revenue of around $3 billion, with a customer base of around 19 million subscribers. This would dwarf the current leading mobile operator in the country, Maxis, which currently has just 9.4 million subscribers.
Discussions between over the merger of Axiata’s Celcom and Telenor’s Digi are already at an advanced stage, according to reports, and are proposing that both parties would hold 33.1%, with the remainder being held by investors. The merged entity would reportedly operator under the name Celcom Digi Berhad.
The merger would yield significant synergies, allowing both companies greater financial resilience from which to launch new services.
"The new entity will have the size and financial capabilities to support Malaysia’s digital aspirations and lead industry development in a connected society," said Jørgen C Arentz Rostrup, head of Telenor Asia and vice-chairman of the new company.
This is not the first time that Telenor and Axiata have explored a potential merger in the Malaysian market. The two companies proposed a $13 billion merger on equal terms back in 2019, but various complications ultimately saw the process scrapped.
Part of the issue here was political, with Indonesian and Malaysian authorities unhappy about ceding control to a Norwegian company. The new deal, by contrast, proposes that local ownership of the new company will exceed 51%, hopefully alleviating these specific issues..
Axiata’s CEO, Izzaddin Idris, said that the ‘complexities’ which had hobbled the previous merger attempt would likely not be an issue this time around.
“I personally can’t foresee any hurdles that we need to cross, any challenges that we need to face, in terms of deal breakers. The 2019 exercise has given us a better understanding of each other,” he said.
For now, the companies are taking care of their due diligence, with a finalised agreement expected to take place in the second quarter of this year.
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