Norway’s Telenor is in discussions on joining forces with Malaysia’s Axiata Group to run a mega pan-Asian telco in South and Southeast Asia, according to Telenor’s press release on May 6, 2019.
With nearly 300 million customers, the new telecoms hub will offer Telenor and Axiata a way to accelerate growth in a highly competitive market.
Reuters reported that an informed source said the value of this merged deal would be $40 billion (30.5 billion pounds), including debt, which set the deal the largest cross-border merger in Asia, excluding China and Japan.
Telenor declined to comment and Axiata did not respond to a request for confirming on the value of the combined firm.
“The bottom line is we need the scale, we need the synergy, we need the balance sheet, we need the strong capabilities of both companies. If we can combine that it will be powerful,” Axiata group CEO Jamaludin Ibrahim told a news conference.
Telenor also announced that under the proposed deal, Telenor will be a majority shareholder owning 56.5 percent while Axiata will be a secondary shareholder owning 43.5 percent, and no cash changing hands.
The joint firm will operate under the name “MergeCo” functioning in nine countries with a total population of close to one billion people including Thailand, Malaysia, Bangladesh, Pakistan, and Indonesia.
The MergeCo will have its operational headquarters in Kuala Lumpur with the majority of functions and is planned to be listed at an international stock exchange as well as on Bursa Malaysia. In Malaysia, the intention is to merge Celcom and Digi, with MergeCo as the majority owner in the combined business.
“By creating one of Asia’s leading telecom players; with strong regional operations in nine countries and close to 300 million customers, we will combine scale and competence, thereby unlocking considerable synergies. I am confident this will create significant value for shareholders and will be beneficial to our customers,” said Sigve Brekke, President and Chief Executive Officer of Telenor Group.