Axiata, Telenor in merger talks to create telecoms giant

Customers make payments at a Celcom mobile telecom outlet at Putrajaya on Monday, May 6, 2019. Malaysia's Axiata Group Berhad says it is in talks with Norway's Telenor ASA to merge their Asian operations to create one of the world's top telecommunications giants with some 300 million customers in nine countries. (AP Photo/Vincent Thian)
Customers walk past a Celcom mobile telecom outlet on Monday, May 6, 2019, in Putrajaya, Malaysia. Malaysia's Axiata Group Berhad says it is in talks with Norway's Telenor ASA to merge their Asian operations to create one of the world's top telecommunications giants with some 300 million customers in nine countries.(AP Photo/Vincent Thian)
Customers walk past a Digi mobile telecom outlet Monday, May 6, 2019, in Putrajaya, Malaysia. Malaysia's Axiata Group Berhad says it is in talks with Norway's Telenor ASA to merge their Asian operations to create one of the world's top telecommunications giants with some 300 million customers in nine countries.(AP Photo/Vincent Thian)

KUALA LUMPUR, Malaysia — Malaysia's Axiata Group Berhad said Monday it is in talks with Norway's Telenor ASA to merge their Asian operations to create one of the world's top telecommunications giants with some 300 million customers in nine countries.

Axiata said in a statement that Telenor is expected to hold a 56.5 percent stake and Axiata 43.5 percent in the proposed "merger of equals."

Both companies operate in Malaysia, Thailand, Myanmar, Bangladesh and Pakistan. Axiata also has a presence in India, Sri Lanka, Nepal, Cambodia and Indonesia but it said its Bangladesh operation would be excluded.

Axiata said merged company could be the largest telecom operator in the region and potentially one of the world's top five mobile infrastructure players. In Malaysia, the union of Axiata's Celcom and Telenor's Digi in Malaysia will form the largest mobile operator in the country.

Annual sales for the merged regional entity are estimated at more than 50 billion ringgit ($12 billion), with earnings of over 20 million ringgit ($4.8 billion), it said. In addition, the merger could translate to potential savings of 20 billion ringgit ($4.8 billion) with economies of scale and scope. Axiata said the merged company will be listed on the Malaysian bourse and later in an international stock exchange.

"We are on the verge of making a new history. This proposed mega merger of equals would create a global champion.... of the nine markets, the new merger will allow us to stake number one positions in six countries," said Axiata President and Group Chief Executive Jamaludin Ibrahim.

Axiata said the companies hope to reach an agreement by the third quarter this year.

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