Telenor based in Norwegian and Malaysian based Axiata Berhad, are in talks to merge the Asian operations with major stake of Telenor Company. These two giant tech companies are in discussion to combine the telecom based non-cash combinations and infrastructure assets into the new company MergeCo to accelerate Asian operations of technology.
If we talk about the equity values, then Telenor is going to own 56.5% in MergeCo and Axiata will own 43.5%. Whereas, these proportions may be subject to change in future. The value of the merger is not certain yet.
Telenor and Axiata Regions
Currently Telenor is the telecommunication company which operates in Pakistan, Malaysia, Thailand, Bangladesh and Myanmar. While countries in which Axiata operates are Nepal, Sri Lanka, Malaysia, Indonesia, Cambodia and Bangladesh. With the combined business, these two big telcos want to create a larger Asian mobile infrastructure company. This mega merger is going to bring close to 300 million subscribers among these nine countries.
According to the reports, these two telcos have communicated with the foreign investment banks regarding the guidelines of current merger and acquisition. Telenor is of opinion that the new company MergeCo will be performing an active role to spread the technology transformation and digitalisation across Asia.
Today we announced that @Telenor and @Axiata are in discussions on joining forces in Asia. A combined entity would serve 300 million customers across 9 markets and become a leading, well diversified pan-Asian telco. Full release here: https://t.co/0hnP20RVvQ
— Telenor Group | #UseHeart (@TelenorGroup) May 6, 2019
The chair of Telenor Group named “Gunn Waersted” said that this Merger aims at creating a diversified and compact telecom infrastructure along with a stronger regional business and operations which finally make it one of the leading company.
Most probably, this agreement between the two companies will take a final turn later in the third quarter of this year. Moreover, the final transaction between Telenor and Axiata will be finalized after the approval of shareholders, regulatory receipt approval and other terms and conditions. Headquarter of the new company MergeCo will be operational in Kuala Lampur. It is planned that MergeCo will be listed on an international stock market and in Bursa Malaysia also.
Later, after this announcement, the share price of Axiata rose to 2.3 % on Monday.