Axiata & Telenor terminate proposed merger

2 weeks ago

Axiata Group Bhd and Telenor ASA have mutually agreed to end discussions on the planned non-cash combination of their telecommunication and infrastructure assets in Asia, due to complexities involved in the transaction.

Telenor ASA is the parent company of Digi.Com Bhd’s largest shareholder Telenor Asia Pte Ltd. Axiata and Digi said today in separate filings with Bursa Malaysia that Axiata and Telenor ASA have been conducting due diligence on the corporate exercise over the last four months.

“Both parties still acknowledge the strong strategic rationale of the proposed transaction. The parties do not rule out that a future transaction could be possible. The parties do not intend to provide further comments,” Axiata said.

Axiata said :”Over the last four months, both parties have been working on due diligence and finalising transaction agreements to be completed within the third quarter of 2019. Due to some complexities involved in the proposed transaction, the parties have mutually agreed to end the discussions.”

Digi said Telenor ASA had today informed Digi that Telenor ASA and Axiata have agreed to end discussions on the proposed transaction.

“In a statement to the Oslo Stock Exchange, Telenor has also announced that they have mutually agreed to end discussions on the proposed transaction with Axiata. Please refer to Telenor’s statement to the Oslo Stock Exchange and their press release dated 6 September 2019 for further information regarding the proposed transaction.

“The board (of Digi) has been informed that over the last four months, both parties have been working on due diligence and finalising transaction agreements to be completed within the third quarter of 2019. Due to some complexities involved in the proposed transaction, the parties have mutually agreed to end the discussions. Both parties still acknowledge the strong strategic rationale of the proposed transaction. The parties do not rule out that a future transaction could be possible,” Digi said.

In a separate Axiata statement, the company said termination of the transaction will not in any way affect the group in its ability to achieve its digital champion aspirations by 2022, because Axiata operates from a position of strength.

Axiata chairman Tan Sri Ghazzali Sheikh Abdul Khalid said in the statement: “The board acknowledges the strong strategic rationale of the proposed transaction and is equally cognizant of the level of complexity of such a deal that extends across nine countries and 14 major entities.”

“Regardless of the expressed synergies of the merger, we are confident that the termination of the proposed transaction does not affect the group in achieving its digital champion ambitions.

“On behalf of the board of Axiata, we are grateful for the support of the Government of Malaysia, our investors and all of our employees during this process,” Ghazzali said.

Axiata president and group chief executive officer Tan Sri Jamaludin Ibrahim said Axiata continues to be a growth story and remains one of the largest mobile telecommunication network operators in the region.

“Today, we are operating from a position of strength, with all eight OpCos (operating companies) performing well and looking cautiously optimistic to meet our 2019 KPIs (key performance indicators).

“Moving forward, we are transforming into a digital technology company in what can be described as an increasingly converged global industry, branching out beyond mobile and consumer to home broadband, enterprise, digital and TowerCo (tower company).

“We are confident of reaping the benefits of our investments in new growth areas, including enterprise, home, digital VAS (value-added service) , digital businesses and infrastructure in the next few years.

“We continue to actively explore possible consolidation and portfolio optimisation opportunities to extract synergies, maximise efficiency and fund future growth areas,” Jamaludin said.

Source: The Edge Markets

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