• Sunday, Aug 01, 2021
  • Last Update : 12:18 pm

Axiata, Telenor seal $15bn deal to form Malaysia’s biggest mobile operator

  • Published at 06:14 pm June 21st, 2021
WEB_Telenor Axiata
Axiata owns 70% stakes of Edotco Bangladesh Company Limited which already acquired the towers of Robi, while Telenor held 55.8% of the shares in Grameenphone Collected

The companies had said in April they were in advanced talks to merge Celcom Axiata Bhd and DiGi.Com Bhd

Malaysian telecoms firm Axiata Group Bhd and Norway’s Telenor ASA will merge their mobile operations in Malaysia in a $15 billion deal, forming a new market leader in the competitive Southeast Asian nation.

The companies had said in April they were in advanced talks to merge Celcom Axiata Bhd and DiGi.Com Bhd, and each party would own 33.1% of the combined firm.

"Assuming a smooth transition, post integration period, we are expecting to see improvement in EBITDA and cashflow margins in the combined entity in step with our ongoing commitment to maximise dividend payout for our shareholders," Izzaddin Idris, president & group CEO of Axiata, said in a statement on Monday.

The union of the country's second and third largest mobile services providers will create a company estimated to have annual revenue of $3 billion, with core profitability of $1.4 billion from a subscriber base of about 19 million, Axiata and Telenor said in a joint statement.

The merged entity, Celcom Digi Bhd, has a "pre-synergy" equity value of nearly 50 billion ringgit ($12.1 billion), the companies said. It will remain listed in Kuala Lumpur, in line with a preliminary agreement announced in April.


Also Read - Axiata, Telenor in talks to form Malaysia's top mobile operator


Two sources familiar with the deal said the implied $15 billion enterprise value of the combined firmwas based on Digi's share price of 4.18 ringgit as of Friday. Digi's shares rose 3.4% on Monday to take its valuation to $8.1 billion.

The deal comes at a time when mobile operators are facing pressure on profits in a challenging industry environment. Celcom Digi's main competitor would be the current largest telecoms operator in the country, Maxis Bhd.

The transaction, subject to regulatory and other approvals, is expected to be completed by the second quarter of 2022.

As a result of the deal, the companies plan cost cuts and savings on capital expenditure with a net present value of about $2 billion, Telenor said in a statement.

Axiata said it entered into the agreement with Digi, where 100% equity interest of Celcom Axiata would be transferred to Digi for a total consideration of 17.76 billion ringgit ($4.3 billion).

Digi said the merger would result in Axiata receiving newly issued shares in Digi and a cash consideration of 1.7 billion ringgit from Digi as new debt in the merged company.

"As part of an ownership equalisation in Digi under the terms of the merger, Axiata will also receive close to 300 million ringgit from Digi's largest shareholder Telenor," it said in a statement.

Axiata said last Tuesday it hoped to seal the merger within days or a week, having completed due diligence.

Morgan Stanley was the sole international advisor to Axiata on the deal, while Citi advised Telenor.

74
Facebook 73
blogger sharing button blogger
buffer sharing button buffer
diaspora sharing button diaspora
digg sharing button digg
douban sharing button douban
email sharing button email
evernote sharing button evernote
flipboard sharing button flipboard
pocket sharing button getpocket
github sharing button github
gmail sharing button gmail
googlebookmarks sharing button googlebookmarks
hackernews sharing button hackernews
instapaper sharing button instapaper
line sharing button line
linkedin sharing button linkedin
livejournal sharing button livejournal
mailru sharing button mailru
medium sharing button medium
meneame sharing button meneame
messenger sharing button messenger
odnoklassniki sharing button odnoklassniki
pinterest sharing button pinterest
print sharing button print
qzone sharing button qzone
reddit sharing button reddit
refind sharing button refind
renren sharing button renren
skype sharing button skype
snapchat sharing button snapchat
surfingbird sharing button surfingbird
telegram sharing button telegram
tumblr sharing button tumblr
twitter sharing button twitter
vk sharing button vk
wechat sharing button wechat
weibo sharing button weibo
whatsapp sharing button whatsapp
wordpress sharing button wordpress
xing sharing button xing
yahoomail sharing button yahoomail