Telenor Group’s Malaysian subsidiary Digi.Com Berhad, and Axiata Group Berhad announced that they have received a Notice of No Objection from the Malaysian Communications and Multimedia Commission on the proposed merger of Celcom and Digi’s telco operations.
With this notice the MCMC consents for the parties to advance to the next phase of the proposed transaction. The completion of the proposed transaction will now be subject to the approval of the Securities Commission, Bursa Malaysia, and by both Axiata and Digi shareholders.
“We have reached a positive milestone in the Malaysian merger process with this regulatory clearance. We are excited to move towards realising the full potential of bringing these two companies together, establishing a commercially stronger and more resilient digital service provider. With the proposed structural moves in Thailand and Malaysia, Telenor has a clear ambition to create future-fit companies that can better support ambitious national digital aspirations and bring new, advanced services to consumers across the region,” said Jørgen Arentz Rostrup, Executive Vice President and Head of Telenor Asia.
To ensure that consumers in Malaysia will continue to benefit from effective competition in the telecommunications sector, Axiata and Digi have offered an undertaking that they believe fully addresses preliminary issues identified by the MCMC. Details are available here.
The parties remain confident that the merged company will realise the estimated synergies, and that the combined entities will establish a stronger, more resilient digital converged service provider well-positioned to respond to shifting market conditions.
The merged company will provide better network quality and coverage. In addition, it will be primed to invest in network expansion, drive 5G solutions and catalyse new growth opportunities for large enterprises and SMEs. The merged company will also leverage combined economies of scale, while creating benefits through strengthening core distribution, delivering improved network operations, and realising efficiencies from operational activities.
The merged company has proposed to invest up to RM250 million (~US$55m / NOK 550m) over five years to build a world-class Innovation Centre in Kuala Lumpur that will keep Malaysia at the forefront of the global digital evolution. The Innovation Centre will be pivotal in advancing extensive research and development leveraging 5G, AI and IOT technology as well as supporting local digital start-ups in growing their technology and innovation capabilities.
The parties estimate that the proposed merger will be completed within the second half of 2022 as announced previously. At completion, Axiata and Telenor will hold equal ownership of 33.1 percent each in the new merged company.