Norway’s Telenor ASA and Axiata Group Bhd, Malaysia’s biggest wireless carrier, are in talks to combine their Asian telecommunication operations in a “mega merger of equals” to create a company with 300 million customers in nine countries.
The proposed transaction would form an entity with sales of about US$13 billion and earnings of about US$5.5 billion. Potential savings, or “synergies,” from the deal would amount to about US$5 billion, Telenor said.
“We aim to create a leading and well-diversified pan-Asian telecom and infrastructure company with substantial synergy potential and strong regional operations,” Telenor chair Gunn Waersted said.
The transaction would provide a stronger foothold for both firms, which have recently seen their ambitions checked in Asia. The combination would be the largest mobile operator in Malaysia, with the merger of Celcom Axiata Bhd and Telenor’s Digi.Com Bhd, and potentially form a global top five mobile infrastructure company.
Telenor also operates in Thailand, Bangladesh, Pakistan and Myanmar, while Axiata has business in Cambodia, Nepal, Sri Lanka and Indonesia. Axiata’s mobile operations in Bangladesh, Robi, are not part of the deal.
Based on the equity value, Telenor would own 56.5 percent of the new company and Axiata the remainder.
A final agreement is sought by the third quarter, but the companies said that there is no certainty that the discussions would result in an accord.
They aim to eventually list the company on an international exchange and in Malaysia.
The deal would continue a transformation for Telenor, which has sold its eastern European businesses and purchased a mobile operator in Finland to focus more on its Nordic home region. Telenor in 2017 sold its unit in India after years of tough competition.
Axiata has seen similar troubles, having to exit Singapore and seeing an expansion in Pakistan checked.
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