Celcom Axiata-Digi.Com merger talks only for Malaysian ops, no plans to combine regional biz

TheEdge Thu, Apr 08, 2021 03:53pm - 1 week ago

KUALA LUMPUR (April 8): Axiata Group Bhd, which today confirmed that its unit Celcom Axiata Bhd will be merging with Digi.Com Bhd to form Celcom Digi Bhd, said the merger only involves the Malaysian operations of both companies.

Axiata president and group chief executive officer Datuk Izzaddin Idris, in a special briefing today, said that there are "no consideration for future merger" of their respective regional operations.

When asked about the possible merger of both the companies' respective Bangladesh operations, Izzaddin said it is impossible to merge the businesses as it will go against the anti-competition act.

Having seen the proposed mega-merger between Axiata and Digi.Com's parent Telenor fall through two years ago, Izzaddin noted that this new merger will be much more focused on consolidating the businesses and transactions in Malaysia.

Both companies will be combining resources to increase their scalability and to future-proof themselves, given the current change of the operating landscape with the boom of IoT (internet of things) and AI (artificial intelligence).

When asked how confident he is of the merger succeeding this time round, Izzaddin commented that "things happen for a reason", adding that all parties should look forward to this new merger deal instead, that will focus not just on a regional standpoint, but also on the global front.

"We will look forward to it. It is not important that it (the previous merger attempt) did not work out," said Izzaddin.

Executive vice president and head of Telenor Asia Jørgen C Arentz Rostrup said the merger will create a strong, capable and large company in Malaysia. "To what will happen in the future, let the future show us," he said.

Recall that Axiata and Digi.Com's parent Telenor mutually agreed to terminate their mega-merger to consolidate both telecommunications giants' operations in Asia after about four months of negotiations in 2019.

Earlier today, Axiata announced that it is in "advance discussions" with Telenor Asia to merge the telco operations of Celcom Axiata Bhd and Digi.Com Bhd in which the parties will have equal ownership, estimated at 33.1% each.

Axiata, together with Malaysian institutional funds, will own over 51% of the merged company, noted Axiata in a Bursa Malaysia announcement.

More to come

Related Stocks

AXIATA 3.800
BURSA 8.500
DIGI 4.250


Login to comment.