Axiata and Telenor successfully completed their previously announced deal to merge Celcom Axiata Berhad (“Celcom”) and Digi (together “MergeCo”).
On a pro forma basis1, MergeCo will serve an estimated 19 million customers with revenue of RM12.4 billion, EBITDA of RM5.7 billion, Profit After Taxation of RM1.9 billion and Free Cash Flow of RM4.0 billion.
Axiata and Telenor will be equal partners with 33.1 percent ownership stake each in MergeCo, and MergeCo will continue to be listed on Bursa Malaysia Securities Berhad (“Bursa”). Targeted to be among the five largest companies listed on Bursa in terms of market capitalisation, MergeCo is valued at a combined pre-synergy equity value of close to RM50 billion3.
The integration planning phase will include further detailed work on synergies and business plan of MergeCo, and initial estimates indicate potential value accretion through cost and capex synergies of around RM8 billion on a net present value basis.
Axiata and Telenor seek to build a new Malaysian Digital Champion
Axiata Group and Telenor Asia are planning to merge the telco operations of Celcom Axiata Berhad (Celcom) and Digi.com Berhad (Digi) into a new Malaysian Digital Champion.
The partners will have equal ownership in the venture estimated at 33.1 percent each. Axiata together with Malaysian institutional funds will own over 51% of the merged company, which will be considered a leading telecommunications service provider in Malaysia in terms of value, revenue and profit, with proforma revenue of about RM12.4 billion, pre-synergy EBITDA of the combined entity at approximately RM5.7 billion, and an estimated 19 million customers. The new company will be named Celcom Digi Berhad and will continue to be listed on Bursa Malaysia.
Chairman of the Axiata Board, Tan Sri Ghazzali Sheikh Abdul Khalid, said: “We are exceedingly pleased to have come this far in discussing the potential merger of our Malaysian operations. The joint creation of a true Malaysian Champion, this merger of Celcom and Digi will see the coming together of the largest mobile operator with the firepower to trigger tremendous opportunities in helping Malaysia leapfrog into the Fourth Industrial Revolution and fulfil our vision of a digitised nation.”
