Telenor said on Thursday that the Securities Commission Malaysia has cleared its planned merger with Axiata Group, a deal that would fold Celcom Axiata and DiGi.Com into one new mobile company called Celcom Digi.
It is the second regulatory yes. Malaysia’s communications regulator, the Malaysian Communications and Multimedia Commission (MCMC), had already said in June it had no objections.
The MCMC’s notice of no objection came on Wednesday, June 29, after the two companies submitted a set of undertakings to deal with competition worries. According to a joint statement from Digi.Com and Celcom, those undertakings included selling off 70 MHz of spectrum and Celcom’s Yoodo brand. They also promised a separate, independent business unit for the wholesale business serving mobile virtual network operators, and a single corporate brand for existing products.
At the time, the regulator noted that Digi.Com and Celcom Axiata are Malaysia’s second- and third-largest mobile operators. Together they would be the biggest. Digi.Com shares rose as much as 7.7 per cent when trading resumed that day, and Axiata’s climbed as much as 2.85 per cent.
Who owns what
Axiata and Telenor, the Norwegian parent of Digi, would each hold 33.1% of the combined company. Two sources with knowledge of the deal told Reuters last year that Celcom Digi would carry an enterprise value of $15 billion. The companies announced the tie-up last year, saying they wanted a stronger player in a market with stiff competition.
Its main rival would be the current market leader, Maxis Bhd.
What is left
Two approvals remain. “The completion of the proposed transaction will now be subject to approval of Bursa Malaysia and Axiata and Digi shareholders,” Telenor said in a statement. The company expects the deal to close by the end of the year. Earlier guidance from the two operators had put completion in the second half of 2022.
Haakon Bruaset Kjoel, chair of Digi.Com’s board, described the MCMC decision as a step closer to “a strong Malaysian company with the combined scale, experience, network and innovation leadership to drive Malaysia’s digital growth in the coming years.”
The companies said they would be well placed to push 5G. Malaysia is rolling out its 5G spectrum in stages and has set up a special purpose vehicle, Digital Nasional, to oversee infrastructure and network deployment.
Sources
- Axiata, Telenor win approval to form Malaysia's top mobile operator
- Telenor and Axiata win key approval for multi-billion dollar Malaysia tie-up
