Norway's Telenor ASA and Malaysia's telecoms company Axiata Group Bhd will consolidate their mobile operations in the southeast Asian country in a $15 billion deal, reports said Tuesday.
The merger of their telecom units -- Digi.com and Celcom Axiata -- will create Malaysia's biggest mobile operator with a combined subscriber base of nearly 20 million and annual revenue of 12.4 billion ringgit, the companies said in a joint statement.
The combined company, Celcom Digi Bhd, will remain listed in Kuala Lumpur, in line with an initial agreement announced in April. Axiata and Telenor will have an equal ownership of 33% each in the merged entity.
"With this merger we bring together financial strength and scale to go beyond connectivity and implement technology that further advances our customers' digital experience," Jørgen A. Rostrup, executive vice president of Asia in Telenor Group, said in quotes by Forbes.
The combined entity will have a market share of around 44%, making it the new market leader, surpassing billionaire Ananda Krishnan's Maxis Bhd, a report by brokerage company Nomura, shows.
The merger may result in cost and capex synergies of around 8 billion ringgit on a net current value basis, according to the filing.
It would also unlock the value of Celcom, as it could leverage on Telenor's expertise in cost management, Nomura said.
"We expect to see improvement in EBITDA and cashflow margins in the combined entity," Izzaddin Idris, President and Group chief executive officer of Axiata, said.
Morgan Stanley was the sole international advisor to Axiata on the merger, while Citi advised Telenor.
