Celcom and DiGi announced today that they’ll be merging through their parent companies, Axiata Group Berhad and Telenor Asia. A press release stated that both parties will have equal ownership estimated at 33.1% each. Axiata together with Malaysian institutional investors will own over 51% of the merger.
As part of the merger transaction, Axiata will receive newly issued shares by DiGi representing 33.1% post-transaction shareholding and a cash equalisation amount of around RM2 billion. RM1.7 billion of which will come from DiGi as new debt, with a balance of RM300 million from Telenor.
The merger will be named Celcom DiGi Berhad and is intended to combine the resources from both parties to accelerate Malaysia’s digitalisation shift borne from COVID-19. It will continue to be listed on Bursa Malaysia.
How Will This Affect Customers?
Not much, really. Existing users will have the choice to maintain their telco brand, as both Celcom and DiGi brands will continue as is, post-merger.
Axiata and Telenor will be developing 5G use cases to provide Malaysians with better connectivity, a move required for the adoption of 5G phones. They will also be creating something called The Innovation Centre, which may play a direct role in upskilling employees for the future economy.
“Digital aspirations and the increasing demand for connectivity call for significant investments,” said Dato’ Izzaddin Idris, Axiata’s President and Group Chief Executive Officer.
“In order to stay ahead of the curve, we must strengthen the foundation to offer continuous high-quality broadband, improve 4G connectivity and subsequently, support the acceleration of 5G rollout.”
It’ll Have An Estimated 19 Million Customers
Axiata stated that Celcom DiGi Berhad will be considered a leading telecommunications service provider in Malaysia in terms of value, revenue and profit, with proforma revenue of about RM12.4 billion, pre-synergy EBITDA of the combined entity at approximately RM5.7 billion, and an estimated 19 million customers.
Both parties also assured that no retrenchments resulting from this merger will happen. Instead, it should create new opportunities for staff and upskill them to build new competence in different areas.
Axiata and Telenor will work towards finalising agreements by the 2nd quarter of 2021, adding that there is no certainty that these discussions will result in any agreement.
Editor’s Note: We’ve reached out to Celcom for more information and will be updating the piece once they reply.