Axiata, Telenor & Digi To Join In 2022, Sign Agreement Worth RM50 Billion! - Kakiforex.com - Financial Market Media No. 1 in the World Axiata, Telenor & Digi To Join In 2022, Sign Agreement Worth RM50 Billion! Axiata, Telenor & Digi To Join In 2022, Sign Agreement Worth RM50 Billion!
InstaForex

June 22, 2021

Axiata, Telenor & Digi To Join In 2022, Sign Agreement Worth RM50 Billion!

 Axiata Group Bhd, Telenor Asia Pte Ltd and Digi.Com Bhd have successfully completed the implementation of an investment feasibility study as well as signed a transaction agreement for the proposed merger of Celcom Axiata Bhd and Digi (MergeCo).


In a joint statement today, all parties involved said the signing of the agreement showed a strong desire to create a strong and more commercially resilient digital integrated service provider.


The statement added that, on a pro forma basis, MergeCo will have about 19 million customers with a turnover of RM12.4 billion, pre-tax revenue of RM5.7 billion, profit after tax of RM1.9 billion and cash flow of RM4 billion.


Axiata and Telenor each hold a 33.1% stake in MergeCo and the combined company will continue to be listed on Bursa Malaysia Securities Bhd.


According to both parties, the integration planning phase will involve more detailed work on MergeCo's synergies and business plans as well as preliminary estimates showing potential value increases through cost synergies and capital expenditure of around RM8 billion based on net present value.


In addition, MergeCo wants to invest up to RM250 million over five years to develop an international innovation center in Kuala Lumpur with the aim of driving the digital transformation of Industrial Revolution 4.0 (4IR) as well as strengthening the local ecosystem and making the country the forefront of digital evolution. global.



The innovation center will conduct extensive research and development, develop 5G use cases, support local start-ups and provide a platform to mobilize a knowledge-based workforce in line with MYDIGITAL aspirations introduced by the government recently.


Axiata President and Chief Executive Officer, Datuk Izzadin Idris, said both parties were highly committed to the proposed merger and in line with their desire to provide strong value to enable customers to be more confident in the country's transition to a digital economy.


“Assuming a smooth transition, post -integration period, we expect to see an increase in EBITDA and cash flow margins in the combined entity in line with our ongoing commitment to maximize dividend payments for our shareholders,” he said.


Meanwhile, Jørgen A. Rostrup, Executive Vice President and Head of Asia Telenor Group, said he hoped to work with Axiata to realize the potential of the proposed merger.


“The telecommunications industry is at the beginning of an exciting digital transition and new technologies will change how we develop and deliver services to the private and public sectors.


“With this merger, we combine efficiency, financial strength and scale to go beyond the network and implement technologies that continue to enhance our customers’ digital experience, ”he explained.


The proposed merger is expected to be finalized by the second quarter of 2022, subject to relevant approvals.