Axiata and Telenor in talks to merge Asian operations
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Axiata and Telenor in talks to merge Asian operations

Sigve Brekke (2).jpg

Telenor Group and Axiata Group Berhad are in talks to merge their business operations in Asia.

The potential non-cash combination of their telecom and infrastructure assets in Asia – to be called MergeCo - would leave Telenor with a majority stake in the combined entity. If the deal goes ahead, Telenor, based on equity value, will own 56.5% in MergeCo and Axiata will own 43.5%.

Both parties hope to create a leading, well-diversified pan-Asian telco with operations across nine countries, with a total population of close to one billion. In addition, MergeCo will have close to 300 million customers, becoming one of Asia’s largest mobile infrastructure companies, operating close to 60,000 tower across the continent.

“Today we announce that Telenor and Axiata are in discussions on joining forces in Asia, one of the most dynamic and innovative regions in the world,” said Gunn Wærsted, chair of Telenor Group. “Together, we aim to create a leading and well-diversified pan-Asian telecom and infrastructure company with substantial synergy potential and strong regional operations. It is Telenor’s strategy to develop and create value from our core telco assets in the Nordic and Asian region. This potential merger is in line with that strategy, set by the board and management.”

Due to the complementary footprint and size of the two companies, a number of synergies between the two have been identified. Approximately $5 billion (NOK 43 billion) in total has been found to support future investments and create shareholder value.

“By creating one of Asia’s leading telecom players; with strong regional operations in nine countries and close to 300 million customers, we will combine scale and competence, thereby unlocking considerable synergies,” said Sigve Brekke, president and chief executive officer of Telenor Group. “I am confident this will create significant value for shareholders and will be beneficial to our customers.”

MergeCo will accelerate technology transformation and digitalisation in Malaysia and across Asia, with plans to establish the Malaysian Research and Innovation Centre 5G, IoT and AI.

Telenor and Axiata aim to finalise their agreement by the Q3 of 2019 following necessary due diligence. The deal is subject to approval by shareholders, receipt of regulatory approvals as well as other customary terms and conditions.

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