Axiata Group CEO Izzaddin confirms Celcom and Digi merger

A man walks past a Celcom store in Kuala Lumpur, January 7, 2016. — Picture by Yusof Mat Isa
A man walks past a Celcom store in Kuala Lumpur, January 7, 2016. — Picture by Yusof Mat Isa

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KUALA LUMPUR, April 8 — Axiata Group Bhd president and group chief executive officer Datuk Izzaddin Idris has today confirmed the merger intentions between Celcom Axiata Bhd, a unit of the group, and Digi.com Bhd.

He said under the new joint venture, the merged entities will be named Celcom Digi Bhd.

“There is a need to consolidate to allow more advanced and efficient operations,” Izzaddin said during a press conference conducted both physically and virtually here.

He said the merger will take into account the financial capacity of both companies.

As part of the merger, Axiata will receive 33.1 per cent of new shares in Digi worth about RM2 billion, of which RM1.7 billion is to come from Digi as new debt. The remaining RM300 million will be from Telenor.

“There will be no clear market leader in this merger, we will be equal shareholders, and not one entity overpowering the other.

“This will ensure that a healthy market competition remains,” Izzaddin said.

He said the merger will also help reduce distribution costs that could be created due to overlapping store locations.

“With the Dual Brand Strategy in place this will effectively target different segments, while improving cost structure, allowing for better pricing.

“Also with convergence in play, both companies will be able to leverage on improved financial capabilities to aggressively grow the segment,” he explained.

He said the government’s MyDigital blueprint announced last month has paved the way for the economic transformation of both telecommunications companies.

Both Telenor and Axiata announced their plan to merge two years ago, only to call it off several months later.

Izzaddin said he does not foresee any impediments this time around.

“The 2019 exercise has given us a better understanding of both our values and the sharing of common objectives in years to come,” he said. 

Izzaddin assured staff in both companies that there would not be any forced layoffs.

“Instead, we are looking at transition support programmes, where we will reskill, upgrade and coach the employees to ensure continuous enhancement in capabilities,” he said.

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