KUALA LUMPUR: Malaysia's Axiata Group Bhd said on Tuesday it could sign a definitive merger agreement with Norway's Telenor to merge both companies' Malaysian operations, in a matter of days or weeks.
Reuters reported the telecoms firm said they have concluded the due diligence process and are hopeful to sign the agreement.
Axiata said shareholders were upbeat about the proposed merger.
Earlier in April, both companies said they were working toward finalising a deal to combine Celcom Networks Bhd and Digi.com Bhd. Axiata and Telenor will have an equal ownership of 33.1% each in the merged entity, Celcom Digi Bhd.
Bloomberg reported the planned merger come as the Malaysian government’s move to build and manage a 5G network on its own instead of relying on private carriers has spurred expectations of a consolidation in the industry. By offering high-speed services via state-owned special purchase vehicle, private players must compete on pricing as there won’t be any differentiation in terms of coverage between them.
“Size matters, not just in the combined cellphone customers, but in having the financial capability to support Malaysia’s digital aspirations, ” Jorgen C. Arentz Rostrup, head of Telenor Asia, said at a briefing. “We’re preparing for a new reality that goes beyond connectivity – to participate in all the new technologies that 5G will enable.”
The merged entity will be have 19 million cellphone users in total, challenging rival Maxis Bhd, and a combined revenue of RM12.4bil (US$3bil). The new company will remain listed on Bursa Malaysia, according to the statement.
Both Axiata and Telenor had previously announced plans to merge their Asian operations in 2019, but the talk was called off several months later.