Axiata on Monday agreed to acquire TeliaSonera’s Nepal arm Ncell in a deal worth US$1.37 billion (€1.26 billion).
Ncell is Nepal’s biggest mobile operator, with 13 million customers representing a 48.8% share of the market. Acquiring Ncell increases Malaysia-based Axiata’s South Asia footprint to five contiguous markets, the other four being Bangladesh, India, Pakistan and Sri Lanka. Nepal will become Axiata’s ninth market in total.
With an enterprise value of approximately 5x EBITDA, Axiata said Ncell represents better value compared to its peers in South Asia and Southeast Asia.
"The scarcity of a controlling stake and very sizeable, high-quality assets within our target region with a strong number one market leadership position, makes Ncell a rare opportunistic asset to come by," said Dato’ Sri Jamaludin Ibrahim, in a statement.
For TeliaSonera, the deal marks the first major step in its plan to exit Eurasia and focus on Europe, in particular the Nordics and the Baltics. In addition to Nepal, TeliaSonera’s Eurasian business includes operations in Kazakhstan, Azerbaijan, Georgia, Moldova, Tajikistan and finally Uzbekistan, where it faced allegations of corruption stemming from its partner Takilant, through which it secured a 3G licence.
The Sweden-based telco announced its intention to withdraw from the region in September.
"I am very pleased to announce a first step and proof point in this reshaping of TeliaSonera," said TeliaSonera CEO Johan Dennelind, in a statement. "I am also glad to see Axiata as a new owner. That gives me comfort that our dedicated employees are in good hands when taking Ncell to the next level."
The deal is subject to regulatory approval and customary closing conditions, and is expected to complete in the first half of 2016.
After the transactions closes, TeliaSonera expects to reap a net gain of 7.5 billion kronor (€807.8 million). Axiata will own 80% of Ncell; the remaining 20% will be held by a local partner as required by Nepalese law.
