Axiata Group negotiating mega merger with Telenor

07 May 2019

Malaysia-based Axiata Group has revealed it is in discussion to merge with Telenor's Asian operations to create a regional powerhouse with total annual revenues of over 50 billion ringgit ($12.05 billion).

Under the preliminary terms of the proposed merger of equals, Telenor would own a 56.5% stake in the merged company, while Axiata would take a 43.5% stake.

The combined company would be one of the largest operator groups in Asia-Pacific, with operating subsidiaries in nine countries with a total of 300 million customers and a market reach of over 1 billion people.

In Axiata's home market, the merger would involve combining Malaysia's Celcom Axiata with Telenor's subsidiary in the nation Digi.Com to create the largest mobile operator in the market.

Axiata's subsidiary in Bangladesh Robi Axiata would continue to be managed independently by Axiata.

The merger is expected to deliver around 20 billion ringgit in synergies through the consolidation of assets as well as the benefits of economies of scale.

In addition to the retail operations, the merger has the potential to create a top five mobile infrastructure player through the combination of Axiata's tower company edotco with Telenor's Asian tower assets.

In a filing with the Malaysian stock exchange, Axiata Group said discussions are still ongoing and there is no guarantee a deal will eventuate, but that it has opted for early disclosure to provide transparency for shareholders during the negotiations.

“This proposed mega merger of equals would create a Global Champion, headquartered right here in Malaysia...Leveraging on the synergies of our combined assets, organizations, talents, best practices, scale and financial firepower, we would create the largest telecom operator in the region,” Axiata president and group CEO Tan Sri Jamaludin Ibrahim said.

“There is a lot of work ahead of us to conclude this deal, but I am excited as this merger would be unparalleled in the history of telecom in Asia and corporate Malaysia.”

Subject to due diligence, the two companies aim to have negotiated the terms of a binding agreement by the end of the third quarter.

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