KUALA LUMPUR – Axiata Group Bhd and Telenor Asia, the major shareholder of Digi.com Bhd, are proposing to merge Celcom Axiata Bhd and Digi to become a company, known as Celcom Digi Bhd (MergeCo).
Axiata, together with Malaysian institutional funds, will own over 51% in the company.
In a statement today, Axiata said as part of the merger transaction, it will receive newly issued shares in Digi, representing 33.1% post-transaction shareholding and cash equalisation amount of about RM2 billion, of which RM1.7 billion will come from Digi as new debt, while the balance of RM300 million will come from Telenor.
“Both parties will work towards finalising agreements in relation to the proposed transaction within the second quarter of this year following due diligence.
“The transaction will be subject to approval by Celcom and Digi shareholders, receipt of regulatory approvals and other customary terms and conditions, and the parties acknowledge that there is no certainty that these discussions will result in any agreement.”
MergeCo will continue to be listed on Bursa Malaysia, and is expected to improve the liquidity and profile of the bourse as one of the largest technology company in Malaysia and among the largest market capitalisation companies in the exchange, according to Axiata.
Axiata said MergeCo will be considered as a leading telecommunications service provider in Malaysia in terms of value, revenue and profit, with a proforma revenue of about RM12.4 billion, pre-synergy earnings before interest, taxes, depreciation, and amortisation of the combined entity at approximately RM5.7 billion, and an estimated 19 million customers.
“With national interests firmly in place, Axiata and key Malaysian institutional shareholders will own more than 51% of MergeCo.
“Axiata has the right to nominate the initial chairman and chief executive officer of MergeCo, and together with Telenor, have agreed to nominate the following individuals to the key positions, namely chairman Datuk Izzaddin Idris, vice-chairman Jørgen C. Arentz Rostrup, chief executive officer Idham Nawawi and deputy CEO Albern Murty.”
In terms of employees, it said both parties reiterate their commitment to protect employee welfare with no forced retrenchments.
Customers will benefit significantly from the merger, as the merged company will have the capacity to invest even more to provide better quality of service and at competitive rates.
In a separate statement, Digi said its board noted the proposal for the Celcom and Digi merger, and the exciting prospect of creating a Malaysian market leader through the proven capabilities of the two established operating companies and strength of two international telecom leaders – Axiata and Telenor. – Bernama, April 8, 2021
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