Axiata, Telenor's Digi complete merger
By Digital News Asia November 30, 2022
- Both parties to hold equal ownership in Celcom Digi at 33.1% each
- Company will be the largest local listed tech company on Bursa Malaysia
Axiata Group Bhd (Axiata), Telenor Asia Pte Ltd (Telenor) and Digi.com Bhd (Digi) announced the completion of the merger of the telco operations of Celcom Axiata Berhad (Celcom) and Digi (together Celcom Digi).
In a joint statement, both parties said that they will both hold equal ownership in Celcom Digi at 33.1% each.
They said on completion, Axiata received newly issued Digi shares representing 33.1% of the enlarged share capital of Digi, and a cash consideration of US$562 million (RM2.5 billion) funded by Digi and to be assumed by the merged entity.
Digi also issued shares to Telenor to reach equal ownership following Telenor's payment of US$67.4 million (RM300 million) to Axiata.
[RM1 = US$0.222]
In driving the consolidation process, the parties said they are moving purposefully to form a world-class Malaysian digital telco that will contribute significantly towards the growth of the country’s digital ecosystem and economy.
They said Celcom Digi will be the largest local listed technology company on Bursa Malaysia.
They added that on a pro forma basis for the financial year 2021, Celcom Digi will serve an estimated 20 million customers, with revenues of RM13.0 billion, and an EBITDA of around RM5.8 billion.
The company remains committed to the previous announced synergy target of RM 8 billion, both parties said.
Through the combination of scale, competencies, financial strengths, and experiences in serving the diverse needs of Malaysian consumers, Celcom Digi presents a solid proposition to propel the nation’s transition towards a digitally enabled high-income society.
Axiata Group Berhad’s chairman Shahril Ridza Ridzuan said on behalf of the board of Axiata, I wish to congratulate the Celcom Digi team on this new beginning.
“It is the culmination of months of meticulous integration work to create Malaysia’s Digital Champion.
“We thank the Malaysian government, the regulators, Telenor and all our stakeholders, as we take this bold step forward to deliver a more sustainable industry structure whilst effectively meeting the evolving needs of Malaysian society,” said Shahril.
He added that Celcom Digi is strategically poised to invest in network expansion and support the growth of Malaysia’s digital ecosystem.
“We are also heartened at the role this tech giant can play in spurring talent development here in our very own backyard, as Malaysia charts advancements in 5G innovations, automation, IoT, AI and cyber resilience, among others,” he said
“Moving forward, I am confident that Celcom Digi – backed by the global experiences, excellent governance standards and financial strengths of Axiata and Telenor as shareholders, is well placed to serve Malaysian consumers and enterprises seeking to step up on digital competitiveness in the current era,” he added.
Jørgen C. Arentz Rostrup, executive vice president and head of Asia, Telenor said connecting people to what matters most will always be Telenor’s foundation for growth in Asia.
“As we embark on a new chapter in Malaysia, we are excited about the new possibilities the new company will ignite.”
“Telenor is committed to be an active owner, bringing technology know-how, experience across international markets and global partnerships with industry giants to Celcom Digi,” he said.
Rostrup said the launch of Celcom Digi represents a major milestone in Malaysia’s digitalization journey, aligned with Telenor’s ambition to build leading operators that serve customers with relevant, attractive, and convenient products and services.
“By combining the strengths of two well-loved local telco brands, the new company can enhance customer satisfaction and provide a broader platform to serve the growing needs of Malaysian SMEs and large enterprises.
“Employees can look forward to development opportunities, build new competencies and shape the growth journey of a successful digital telecom champion,” he said.
As part of its nation building efforts, Celcom Digi will also invest up to RM250 million over five years in building a world-class Innovation Center in Kuala Lumpur.
It said the aim is to catalyse the 4IR digital transformation and strengthen the local ecosystem through the adoption of IoT, AI, cloud computing and 5G.
Bridging the digital divide in rural areas to spur greater socioeconomic participation will be a priority, it added.
In addition to Axiata and Telenor, Malaysian institutional investors such as the Employees Provident Fund, Permodalan Nasional Berhad and the Retirement Fund (Incorporated) among others are also shareholders of the new company.
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