Malayian telecom operator Axiata Group Berhad and Norway’s Telenor Group have mutually agreed to end discussions regarding a non-cash combination of their telecom and infrastructure assets in Asia.
Over the last four months, both parties have been working on due diligence and finalising transaction agreements to be completed within the third quarter of 2019. Due to some complexities involved in the proposed transaction, the parties have mutually agreed to end the discussions, Telenor stated in a release.
The company, however, stated that both parties still acknowledge the strong strategic rationale of the proposed transaction and that they do not rule out a possible future transaction.
A joint venture would have created a telecom service provider with nearly 300 million customers across South Asia and Southeast Asia. The joint venture would have created an entity worth $40 billion including debt, and competed with firms such as Singapore Telecommunications.
The non-cash combination of Telenor’s telecom and infrastructure assets in Asia with Axiata’s would have had operations in nine countries including Thailand, Malaysia, Bangladesh, Pakistan and Indonesia, with a total population of nearly 1 billion people.
Telenor sold its central European operations last year as it seeks to focus on its Nordic and Asian businesses.
Failure of the talks also highlights the difficulty of merging phone operators around the world and the growing problems it presents for investors.
Shares in Telenor fell after Friday’s announcement by the two companies that talks were over.