,Datuk Izzaddin Idris, President and Group CEO of Axiata Group (left) and Jorgen C. Arentz Rostrup, Exec. Vice President and Head of Telenor Asia (right) hold a press conference Thursday to brief the media on their talks. - CHAN TAK KONG/The Star
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KUALA LUMPUR: The once-failed merger talks between Axiata Group Bhd and Norway’s Telenor ASA is back and the sweetener in the deal this time to make it more palatable is an equal shareholding of 33% by both parties.
This is a far cry from the 56.5:43.5 ratio that had been proposed in the last merger of equals in May 2019 with Telenor taking the lead to create a regional giant. However, too many hurdles saw that merger falling through.
This time around the scale of the merger is smaller and limited to only the Malaysian operations, between Axiata’s wholly owned unit, Celcom Axiata Bhd, and Telenor’s 49% unit, Digi.com Bhd, to create a merged unit, to be known as Celcom Digi Bhd (CDB).
Yesterday both parties announced they were in advanced discussions to merge their local mobile units. Both Axiata and Telenor will hold a 33.1% stake each in CDB.
The rest of the stake will be held by the Employees Provident Fund (9.8%), Permodalan Nasional Bhd (7%), KWAP (2.4%) and the public (14.6%), with the listed status of Digi being transferred to CDB.
This confirms a StarBiz report titled “Celcom-Digi merger may be on the cards again’’ (pic) which had appeared on March 6.(pic above)
“We are keeping the brands as they merge. The merger will generate significant synergies and attract global partnerships. The merged entity will be among the top five listed companies by market capitalisation, ’’ Axiata president and group CEO Datuk Izzaddin Idris said at a press conference yesterday.
Executive vice-president and head of Telenor Asia Jorgen C Arentz Rostrup added that “it was a good match’’ and with the telecoms landscape changing rapidly, content is significant and size does matter.
Why the change in heart to push for a merger the second time around may be puzzling and the executives at the press conference declined to state reasons why it had failed in the first place.
But they did name top executives lined up for CDB, which were said to be the many points of contention of the previous merger, as was the controlling shareholding that was going to Telenor then.
Izzaddin and Jorgen will be the chairman and vice-chairman of CDB, while existing Celcom CEO Idham Nawawi and Digi CEO Albern Murty will be the CEO and deputy CEO of CDB respectively.
The changing mobile landscape may also be a factor that pushed them to merge, those familiar with the deal said.