Telenor and Axiata merger to provide $5 billion synergies

Telenor Group and Axiata Group Berhad are in initial discussions regarding merger of telecom and infrastructure assets in Asia. It is anticipated that Telenor, based on equity value, will own 56.5% in MergeCo and Axiata will own 43.5%. This is preliminary discussion between two parties and is subject to adjustments and due diligence in future.

The MergeCo will have a pro-forma revenue and pre-synergy EBITDA of approximately $13 billion and $5.5 billion.

The merger will provide opportunities to capture substantial synergies estimated at around $5 billion in total; support future investments and create shareholder value. Not only this, the MergeCo will take an active role in accelerating technology transformation and digitalisation in Malaysia and across Asia, and plans to establish the Malaysian Research and Innovation Centre which will focus on emerging technologies such as 5G, Internet of Things (IoT) and Artificial Intelligence (AI). The investment in new technologies will also act as a test bed for deployment of new technologies in pan-Asia operations.

Asian Footprint of Telenor and Axiata:

Telenor’s Asian footprint – Thailand, Malaysia, Bangladesh, Pakistan and Myanmar 

Axiata footprint – Malaysia, Bangladesh, Cambodia, Nepal, Sri Lanka and Indonesia, and the tower business edotco. Axiata’s mobile operations in Bangladesh, Robi, will continue to be separately and independently managed by Axiata

Source: DigiAnalysys

The pan-Asian telco will have close to 300 million customers and operating approximately 60,000 towers across Asia. The MergeCo will have its operational headquarters in Kuala Lumpur and is planned to be listed at an international stock exchange as well as on Bursa Malaysia. 

Telenor has maintained a strong position in the Norwegian market with accelerating fixed broadband rollout and the world’s fastest mobile network. In Sweden, Telenor has a mobile subscription base of 2.7 million and the mobile data consumption is around 11 GB data per month. In Denmark, Telenor has continued to demonstrate value creation in 2018 and has established a significantly more efficient business, mobile ARPU improved and the investment level remained sound. The cost synergies will help Telenor to increase its investment on non-Asia operations like Norway, Sweden and Denmark for 5G and future technologies like AI (Artificial Intelligence, ML (Machine Learning) and others.

“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,” said Gunn Wærsted, Chair, Telenor Group.

“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. I am confident this will create significant value for shareholders and will be beneficial to our customers,” said Sigve Brekke, President and Chief Executive Officer, Telenor Group.

The merger is subject to approval by shareholders, receipt of regulatory approvals and other customary terms and conditions and is expected within the third quarter of 2019 if both the parties agree during discussion.



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