KUALA LUMPUR, 9 April 2021: These two telcos, Celcom and Digi are in the final stages to merge the companies by name, CelcomDigi Berhad. Through the signed agreement, the companies will be formed where it will take place in the second quarter of 2021. In a statement issued on Thursday, Celcom’s parent company, Axiata Group of the company, will hold a 51 percent stake in the new company. Axiata said that the latest move is to combine the scale, infrastructure in the new company.
“MergeCo will be considered a leading telecommunications service provider in Malaysia in terms of value, profit, pro forma revenue of around RM 12.4 billion, while pre-synergy earnings before interest, tax, depreciation, and amortization(EBITDA) will reach RM 5.7 billion. They also said the Celcom-Digi merger will also form 19.1 million customers nationwide, making Celcom Digi the market leader. Axiata GroupPresident and Chief Executive Officer (CEO), Datuk Izzaddin Idris, said the formation of CelcomDigi would see Axiata and Telenor each holding a 33.1 percent stake, while the rest were controlled by institutional shareholders and the people. The merger, for now, will only involve the Malaysian market and it not be related to other markets where Axiata and Telenor entities operate, he said at a special press conference for the announcement on 8th April 2021.
The merger, formerly known as MergeCo, names Izzaddin and Rostrup, respectively as Chairman and Deputy Chairman of CelcomDigi. On plans to merge overseas operations, Rostrup explained, Telenor -Axiata does not have any considerations at the moment, but does not rule out the existence of other collaborations in the future. In 2019, Axiata and Telenor announced negotiations to establish a new global entity, MergedCo, by consolidating their operations in the ASEAN as well as Southeast Asian markets. From a domestic point of view, the plan was to merge Celcom and Digi into MalaysiaCo.
Written by: Jeesvetthra Subramaniam
