Norway-based Telenor and Malaysia-based Axiata announced today that they were in discussions to create a combined company that would serve close to 300 million subscribers in South Asia.
The potential noncash deal would combine Telenor and Axiata's telecom and infrastructure assets in Asia to form a company that could generate $300 billion in annual sales.
If the deal comes to fruition—and both companies pointed out there's no certainty that it will—Telenor would own a majority stake of 56.5% of the new company while Axiata would own 43.5%, although those numbers could change a bit going forward.
The proposed Pan-Asian telco would operate across nine countries with a total population of close to 1 billion people. The merged company would become one of Asia's largest mobile infrastructure companies with about 60,000 towers across Asia.
The operational headquarters would be based on Kuala Lumpur with stock listed on international exchanges as well as on Bursa Malaysia. In Malaysia, the plan is to merge Celcom and Digi, with the combined company as the majority owner of both.
“Today, we announce that Telenor and Axiata are in discussions on joining forces in Asia, one of the most dynamic and innovative regions in the world," said Gunn Wærsted, chairman of Telenor Group, in a prepared statement. "Together, we aim to create a leading and well-diversified pan-Asian telecom and infrastructure company with substantial synergy potential and strong regional operations. It is Telenor’s strategy to develop and create value from our core telco assets in the Nordic and Asian region. This potential merger is in line with that strategy, set by the Board and Management."
Telenor and Axiata said they would toward finalizing agreements in relation to the proposed transaction within the third quarter of 2019 following due diligence and regulatory reviews.