Axiata Group and Telenor are reportedly considering merging their Asian telecom and infrastructure assets in a non-cash agreement.
If the proposal goes ahead, the Norwegian operator group would take 56.5% equity value of the merged unit, while the Malaysian firm would hold the remaining 43.5%. However, both groups noted that the talks are in the earliest stages, with due diligence and adjustments required ahead of any potential deal.
Should a merger be agreed, it would require the approval of shareholders and regulators, and would be subject to standard terms and conditions, but the companies would aim to have it concluded by Q3 and have confirmed that it would be headquartered in Kuala Lumpur.
The merged unit would serve almost 300 million customers across nine countries, combining Telenor’s markets of Bangladesh, Malaysia, Myanmar, Pakistan and Thailand with Axiata’s footprint in Bangladesh, Cambodia, Indonesia, Malaysia, Nepal and Sri Lanka. It would also fold in Axiata’s tower business edotco, making the joint unit one of the largest infrastructure firms in Asia with around 60,000 towers across the continent.
Axiata president and CEO Jamaludin Ibrahim said that “the dynamic combination of breadth, experience and knowledge of Asia’s two regional champions” would “bring the best of Asian and European cultures”.
“Leveraging on the synergies of our combined assets, organisations, talents, best practices, scale and financial firepower, we would create the largest telecom operator in the region. Additionally, we would also intend to create the largest mobile operator in Malaysia, one of the largest towercos in the world and the largest innovation centre in the region”, he added.
Telenor CEO Sigve Brekke noted that the “scale and competence” offered by the merger could create “considerable synergies”, suggesting a saving of $5 billion as achievable by streamlining businesses.
While Axiata would still manage its Robi operation in Bangladesh, the groups would merge their Malaysian brands, Celcom Axiata and Digi, with the new company taking a majority shareholding. Additionally, the merged company would be listed on both the Bursa Malaysia and the international stock exchange.