By NG MIN SHEN / Graphic By TMR
AXIATA Group Bhd and Telenor ASA have mutually agreed to end discussions for a proposed non-cash merger of their Asian telecom and infrastructure assets.
“Over the last four months, both parties have been working on due diligence and finalising transaction agreements to be completed within the third-quarter of 2019.
“Due to some complexities involved in the proposed transaction, the parties have mutually agreed to end the discussions,” Axiata and Telenor said in separate statements today.
Both parties still acknowledge the strong strategic rationale of the proposed transaction. The parties do not rule out that a future transaction could be possible,” the telecommunications companies (telcos) added.
The parties do not intend to provide further comments.
In its statement, Axiata chairman Tan Sri Ghazzali Sheikh Abdul Khalid said the board acknowledges the rationale of the proposed merger, and is “equally cognisant of the level of complexity of such a deal” that extends across nine countries and 14 entities.
“Regardless of the expressed synergies of the merger, we are confident that the termination of the proposed transaction does not affect the group in achieving its digital champion ambitions,” he said.
“We continue to actively explore possible consolidation and portfolio optimisation opportunities to extract synergies, maximise efficiency and fund future growth areas,” Axiata president and group CEO Tan Sri Jamaludin Ibrahim added.
Axiata and Telenor had in May announced their intention to combine their Asian operations to create an international merged company, in response to rising data monetisation cost, heightened competition and the need to increase capital expenditure despite flat revenue growth.
The proposal also involved plans to merge Axiata’s Celcom Axiata Bhd and Telenor’s Digi.Com Bhd (Digi) into Malaysia’s largest mobile operator.
Jamaludin had said at a press briefing last month (Aug 29) that discussions for the merger were still ongoing and that he was “optimistic” that the deal would go through.
It was reported that the two parties were facing difficulties in negotiating the terms of control over the merged entity, as well as issues of national and staff interests.