Telenor’s Digi and Axiata’s Celcom receive regulatory nod for merger in Malaysia
06 Jul 2022
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Telenor Group’s Malaysian subsidiary Digi.Com Berhad (Digi), and Celcom Axiata Berhad, a member of the Axiata Group, last week said they have received a notice of `No Objection’ from the Malaysian Communications and Multimedia Commission (MCMC) on the proposed merger of Celcom and Digi’s telco operations.
Axiata Group Berhad, commonly known as Axiata, formerly known as TM International Berhad, is a Malaysian multinational telecommunications conglomerate with extensive operations in Asia. It is one of the largest wireless carriers in the country.
Celcom Axiata Berhad, DBA Celcom, is the oldest mobile telecommunications provider in Malaysia. Celcom is a member of the Axiata group of companies
With this notice the MCMC has consented for the parties’ advance to the next phase of the proposed transaction. The completion of the proposed transaction will now be subject to the approval of the Securities Commission, Bursa Malaysia, and by both Axiata and Digi shareholders, Telenor stated in a release.
“We have reached a positive milestone in the Malaysian merger process with this regulatory clearance. We are excited to move towards realising the full potential of bringing these two companies together, establishing a commercially stronger and more resilient digital service provider. With the proposed structural moves in Thailand and Malaysia, Telenor has a clear ambition to create future-fit companies that can better support ambitious national digital aspirations and bring new, advanced services to consumers across the region," said Jorgen Arentz Rostrup, executive vice president and head of Telenor Asia.
To ensure that consumers in Malaysia will continue to benefit from effective competition in the telecommunications sector, Axiata and Digi have offered an undertaking to fully addresses preliminary issues identified by the MCMC.
The parties remain confident that the merged company will realise the expected synergies, and that the combined entities will establish a stronger, more resilient digital converged service provider well-positioned to respond to shifting market conditions, Telenor said.
The merged company will provide better network quality and coverage. In addition, it will be primed to invest in network expansion, drive 5G solutions and catalyse new growth opportunities for large enterprises and SMEs. The merged company will also leverage combined economies of scale, while creating benefits through strengthening core distribution, delivering improved network operations, and realising efficiencies from operational activities, it added.
The merged company has proposed to invest up to RM250 million ($55m / NOK 550m) over five years to build a world-class Innovation Centre in Kuala Lumpur that will keep Malaysia at the forefront of the global digital evolution. The Innovation Centre will be pivotal in advancing extensive research and development leveraging 5G, AI and IOT technology as well as supporting local digital start-ups in growing their technology and innovation capabilities.
The parties estimate that the proposed merger will be completed within the second half of 2022 as announced previously. At completion, Axiata and Telenor will hold equal ownership of 33.1 per cent each in the new merged company.
