Axiata, Telenor Partner To Merge Malaysian Operations In $12.1B Deal: Report

• Axiata Group Bhd (OTC: AXXTF) and Telenor ASA (OTC: TELNF) (OTC: TELNY) collaborated to combine their Malaysian mobile operations, Bloomberg reports.

• The deal is valued at $15 billion, Reuters reports.

• In April, the companies announced advanced discussions to merge Celcom and Digi.

• Axiata will transfer its stake in Celcom Axiata Bhd. to Digi.com Bhd (OTC: DIGBF) for 17.8 billion ringgits for shares and 1.7 billion ringgits in cash from Digi, and 300 million ringgits from Telenor. The merged entity will have a “pre-synergy equity value” of 50 billion ringgits ($12.1 billion).

• Axiata and Telenor will have equal ownership of 33.1% each in the entity known as Celcom Digi Bhd. The entity will have an estimated subscriber base of 19 million, revenue of $3 billion, and profit of $1.4 billion. The arrangement is estimated to lead to cost and Capex synergies of 2 billion ringgits on a net present value basis.

• Celcom Digi’s main competitor will be Maxis Bhd (OTC: MAXSF).

• The transaction is estimated to complete by Q2 of 2022.

• Celcom Digi will also dedicate 250 million ringgits over five years to build an innovation center in the capital city of Kuala Lumpur.

• Price action: TELNY shares closed lower by 1.95% at $16.68 on Friday.

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