Axiata, Telenor ASA to conduct due diligence on proposed merger

An Axiata logo is seen at its headquarters in Kuala Lumpur January 3, 2013. The due diligence process includes looking into the balance sheet and legal issues, and the process is expected to be concluded within three to six months. — Reuters pic
An Axiata logo is seen at its headquarters in Kuala Lumpur January 3, 2013. The due diligence process includes looking into the balance sheet and legal issues, and the process is expected to be concluded within three to six months. — Reuters pic

KUALA LUMPUR, May 29 — Axiata Group Bhd and Norwegian multinational telecommunications company, Telenor ASA, will be conducting a due diligence exercise for their proposed merger, also known as MergedCo.

President and group chief executive officer Tan Sri Jamaludin Ibrahim said the due diligence process includes looking into the balance sheet and legal issues, adding that the process is expected to be concluded within three to six months.

“We will have to agree on the management team of primarily MergedCo and at least a few people in (its subsidiary) MalaysiaCo.

“As for the rest of the operating companies on their side and our side, there is no intention to change the management,” he told reporters after the group’s annual general meeting here today.

MergedCo will have a roughly 67 per cent stake in MalaysiaCo — a planned merger between Celcom  Axiata Bhd and Digi.Com Bhd.

Jamaludin said the group was optimistic that the deal would go through as it has received blessings from Khazanah Nasional Bhd.

Khazanah Nasional has a 37 per cent stake in Axiata.

Following the signing of the agreement for the merger, the parties involved will take another six to nine months to obtain the necessary approvals from the authorities in the countries they operate in.

“If all goes well, we expect the merger to be completed some time in the third quarter of 2020,” he said.

On pricing, Jamaludin said that the decision would depend on the business plan.

“But logically, it will be a lot cheaper than before,” he said.

Meanwhile, Jamaludin said the group was positive on the Malaysian Communications and Multimedia Commission’s (MCMC) Guidelines on Mergers and Acquisitions.

“I was made to understand by MCMC that the guideline was not done because of us as it was developed some time ago. Of course they expedited it because of us, but it is not because of us per se.

“In fact, one of things I like about the guideline is that it adds some weight into how we contribute to the nation beyond the merger itself,” he added.

Recently, the MCMC released the Guidelines on Mergers and Acquisitions and Guidelines on Authorisation of Conduct.

The guidelines are aimed at increasing transparency and providing clarity to the industry on MCMC’s approach when assessing mergers and acquisitions of telecommunications companies.

Meanwhile, Jamaludin said Axiata would roll out its 5G technology by 2021, at the earliest. — Bernama

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