Axiata Group Berhad (Axiata) and Telenor ASA (Telenor) (together Parties) are in discussions to establish a new merged global entity (“Proposed Transaction”) by combining Axiata and Telenor’s Asian operations within both their ASEAN and South Asia (“Region”) footprint markets.
This is in line with the intention of creating a Global Champion comprising of their diverse market-leading portfolio of telecommunications, digital and infrastructure assets.
The parties have indicated that there is no certainty the Proposed Transaction will result in any binding agreement or obligations on the Parties to proceed with any acquisition, merger or divestment.
While several issues and matters have yet to be determined and agreed upon, given the mutual due diligence to be undertaken shortly involving several entities across nine countries, Axiata has opted for an early voluntary disclosure to provide transparency to its shareholders as discussions progress.
Globally, the telecommunications industry has seen significant shifts in terms of industry structure whereby, the distinction between fixed and wireless services is blurring towards convergence. At the same time, market competition continues to intensify beyond traditional players but also from strong internet-based services and content providers. Technology advancement and digital service adoption have surged exponentially, triggering robust opportunities but also complexities across the Consumer, Home, Enterprise and Internet of Things (“IoT”) market segments.
In parallel, prices for products and services have steadily fallen in the past few years while capital expenditure especially on network, quality coverage and advanced technology continue to rise in an effort to meet the ever-increasing customer demand for data. In this highly competitive environment, to innovate, deliver affordable and competitive services as well as improve profitability, the ability to scale rapidly, deliver efficiencies and deploy global best practices become increasingly crucial. The Proposed Transaction aims to enable the new merged entity (MergedCo) to bring together Axiata and Telenor’s Asian operations unique combination of scale, competencies and vast experiences in leading and managing emerging and frontier markets. The Parties have also stated their stipulated intention to list the MergedCo on Bursa Malaysia and another major international exchange within the next few years. As a Global Champion, the MergedCo will now include a Malaysian Champion, a Global TowerCo, and the largest Innovation Center in this Region, all to be headquartered in Malaysia. www.axiata.com
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