Merger plan with Norway’s Telenor on track, says Axiata

Malaysian Axiata Group Berhad yesterday said its planned merger with Norwegian telecoms peer Telenor ASA is on track, after local media reported the deal may have hit a snag. Axiata Group Chief Executive Officer Jamaludin Ibrahim at an earnings briefing said discussions with Telenor are likely to take three to six months, with a target to conclude talks by November.

"We want to make sure we protect our national and staff interests. That doesn't mean there are hiccups or issues," said Jamaludin, adding he was optimistic the deal would succeed. Jamaludin also said there would be "generally no change" to the shareholding structure of the deal, or to top management appointments.

Axiata and Telenor in May said they would begin talks to run a jointly owned telecoms giant in South and Southeast Asia serving nearly 300 million customers, as they seek growth in an ever-competitive market. Reuters previously reported citing a source that the merged entity would be worth $40 billion including debt, making the deal the largest cross-border merger in Asia, excluding China and Japan.

Malaysian media reported earlier this month that the deal could be pulled as the parties could not agree terms. The pair had aimed to finalise a binding agreement by the third quarter of 2019. Axiata yesterday said net profit for the second-quarter ended June swung to 204.1 million ringgit ($48.71 million) on higher revenue and cost management initiatives. That compared with a net loss of 3.36 billion ringgit a year earlier due to an impairment charge following the merger of an associate company.

Revenue for the period rose 4.7 per cent to 6.15 billion ringgit, from 5.87 billion ringgit last year.

Axiata said second-quarter profit was slightly offset by higher taxes in Bangladesh and loss of contribution from M1 Ltd, having sold its shareholding in the Singapore telco in February.

Experts concerned with the telecoms sector in Bangladesh, however, hinted that some possible impact of the proposed merger would take place in the mobile tower management market in Bangladesh.

At present Malaysia-based edotco manages 1800 mobile towers of Robi, while Grameenphone manages its own towers. After the merger edotco could get all the towers of GP that could make monopoly in the tower industry.

Robi Axiata Limited is a joint venture between Axiata Group of Malaysia, Bharti Airtel, of India and NTT Docomo Inc of Japan. Axiata holds 68.7 per cent controlling stake in the entity, Bharti holds 25 per cent, while the remaining 6.3 per cent is held by NTT Docomo of Japan.

GP is a joint venture between Telenor (55.8 per cent), the largest telecommunications service provider in Norway having mobile phone operations in 12 other countries, and Grameen Telecom Corporation (34.2 per cent, a non-profit organisation of Bangladesh. The other 10 per cent shares belong to retail and institutional investors

Merger plan with Norways Telenor on track, says Axiata

Malaysian Axiata Group Berhad yesterday said its planned merger with Norwegian telecoms peer Telenor ASA is on track, after local media reported the deal may have hit a snag. Axiata Group Chief Executive Officer Jamaludin Ibrahim at an earnings briefing said discussions with Telenor are likely to take three to six months, with a target to conclude talks by November. We want to make sure we protect our national and staff interests. That doesnt mean there are hiccups or issues, said Jamaludin, adding he was optimistic the deal would succeed. Jamaludin also said there would be generally no change to the shareholding structure of the deal, or to top management appointments. Axiata and Telenor in May said they would begin talks to run a jointly owned telecoms giant in South and Southeast Asia serving nearly 300 million customers, as they seek growth in an ever-competitive market. Reuters previously reported citing a source that the merged entity would be worth $40 billion including debt, making the deal the largest cross-border merger in Asia, excluding China and Japan. Malaysian media reported earlier this month that the deal could be pulled as the parties could not agree terms. The pair had aimed to finalise a binding agreement by the third quarter of 2019. Axiata yesterday said net profit for the second-quarter ended June swung to 204.1 million ringgit ($48.71 million) on higher revenue and cost management initiatives. That compared with a net loss of 3.36 billion ringgit a year earlier due to an impairment charge following the merger of an associate company. Revenue for the period rose 4.7 per cent to 6.15 billion ringgit, from 5.87 billion ringgit last year. Axiata said second-quarter profit was slightly offset by higher taxes in Bangladesh and loss of contribution from M1 Ltd, having sold its shareholding in the Singapore telco in February. Experts concerned with the telecoms sector in Bangladesh, however, hinted that some possible impact of the proposed merger would take place in the mobile tower management market in Bangladesh. At present Malaysia-based edotco manages 1800 mobile towers of Robi, while Grameenphone manages its own towers. After the merger edotco could get all the towers of GP that could make monopoly in the tower industry. Robi Axiata Limited is a joint venture between Axiata Group of Malaysia, Bharti Airtel, of India and NTT Docomo Inc of Japan. Axiata holds 68.7 per cent controlling stake in the entity, Bharti holds 25 per cent, while the remaining 6.3 per cent is held by NTT Docomo of Japan. GP is a joint venture between Telenor (55.8 per cent), the largest telecommunications service provider in Norway having mobile phone operations in 12 other countries, and Grameen Telecom Corporation (34.2 per cent, a non-profit organisation of Bangladesh. The other 10 per cent shares belong to retail and institutional investors