KUALA LUMPUR: Axiata Group Bhd and Telenor ASA are set to create a new global champion with discussions to combine their Asian operations under a new merged global entity (MergedCo).
In a filing to Bursa Malaysia yesterday, Axiata said both parties would work towards finalising an agreement within the third quarter of 2019, resulting in Telenor being the majority shareholder of the global MergedCo with anticipated 56.5 percent ownership while 43.5 percent by Axiata.
“The parties have indicated that there is no certainty the proposed transaction will result in any binding agreement or obligations on the parties to proceed with any acquisition, merger and divestment,” it said.
Axiata said under the proposed exercise, both parties have set the intention to list the MergedCo on Bursa Malaysia and another major international exchange within the next few years.
“As a global champion, the MergedCo will now include a Malaysian champion, a global towerco and the largest innovation centre in this region, all to be headquartered in Malaysia,” it added.
Axiata said the MergedCo will control operating subsidiaries in nine countries with a combined population of more than one billion and 300 million customers.
Overall, it is set to control the pole positions in six countries, ranking second in two countries and third position in one market.
However, its Bangladesh unit, Robi Axiata Ltd will continue to be managed independently by Axiata following completion of the exercise.
The MergedCo on the merger will have proforma revenue of more than RM50 billion and Earnings Before Interest, Taxes, Depreciation & Amortisation (EBITDA) of more than RM20 billion, it said.
With its unique portfolio, the MergedCo will be one of the largest communications groups in the region in the Asean and South Asia (region) in terms of value, revenue and profit with a strengthened balance sheet to support aggressive growth and expansion in the consumer, home, enterprise, and internet of things (IoT/artificial intelligence market segments.
MergedCo also has the potential to deliver up to RM20 million incremental value in synergies through consolidation if assets and organisations, economies of scale and scope and complementary best practices of the parties.
Locally, the merged of Celcom Axiata Bhd (Celcom) and Digi.Com Bhd will, in turn, become the largest mobile operator in Malaysia.
On the global towerco, Axiata said it will also potentially lead to the formation of a global top five mobile infrastructure player, by combining edotco Group Sdn Bhd (edotco), the existing Axiata towerco, which is currently the 13th largest towerco globally, and Telenor’s Asian tower assets.
Meanwhile, the innovation centre will establish the largest innovation centre in the region to include IoT and 5G, as well as a global talent factory.
Axiata president and group chief executive officer, Tan Sri Jamaludin Ibrahim said the newly merged entity would enable the company to leapfrog into Axiata 4.0 to capture the global momentum of Fourth Industrial Revolution (IR 4.0) and grow beyond mobile to Broadband, Digital, 5G, IOT, AI and Solutions.
“The merged company will actively support our own government’s aspirations to attract world-class organisations, and lead in fuelling innovation and the focused development of Malaysian and global talents.
“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,” he said.
Should the parties agree to an agreement, the eventual transaction will be subject to approvals by shareholders and regulatory bodies, amongst others.
Meanwhile, in a separate statement, Digi said Telenor has also made an announcement regarding the potential non-cash combination of telecom and infrastructure assets to the Oslo Stock Exchange yesterday. – Bernama
