KUALA LUMPUR (April 8): Axiata Group Bhd announced that it is in “advance discussions” with Telenor Asia to merge the telco operations of Celcom Axiata Bhd and Digi.Com Bhd in which the parties will have equal ownership estimated at 33.1% each.
Axiata, together with Malaysian institutional funds, will own over 51% of the merged company to be named Celcom Digi Bhd, noted Axiata in a Bursa Malaysia announcement.
This confirms The Edge report this morning that Celcom will be merging with Digi.Com.
The Bursa announcement noted that as part of the merger transaction, Axiata will receive newly issued shares in Digi.Com representing a 33.1% post-transaction shareholding and cash equalisation amount of around RM2 billion, of which RM1.7 billion will come from Digi.Com as new debt, while the balance of RM300 million will come from Telenor.
“The merged entity will be considered a leading telecommunications service provider in Malaysia in terms of value, revenue and profit, with a pro forma revenue of about RM12.4 billion, pre-synergy EBITDA (earnings before interest, taxes, depreciation and amortisation) of the combined entity at approximately RM5.7 billion and an estimated 19 million customers,” Axiata noted.
It added that “with national interests firmly in place, Axiata and key Malaysian institutional shareholders will own more than 51% of the merged entity”.
The announcement stated that Axiata would have the right to nominate the initial chairman and chief executive officer (CEO) of the merged entity, and together with Telenor, had agreed to nominate the following individuals to the key positions:
Chairman — Datuk Mohd Izzaddin Idris
Vice chairman — Jorgen C. Arentz Rostrup
Chief executive officer (CEO) — Mohamad Idham Nawawi
Deputy CEO — Albern Murty
In addition, the announcement said that the merged entity will continue to be listed on Bursa.
Axiata noted that the merged company is “expected to improve the liquidity and profile of Bursa as one of the largest technology company in Malaysia and among the largest market capitalisation companies of the exchange”.
More to come
