The Celcom-DiGi Merger & What It Means For Their Existing Customers
Celcom and DiGi today announced their merger through their parent companies, Axiata Group Berhad and Telenor Asia. A press release says the two sides will have an equal stake estimated at 33.1% each. Axiata and Malaysian institutional investors will own more than 51% of the merger.
As part of the merger transaction, Axiata will receive newly issued shares by DiGi representing a 33.1% post-trade stake and a cash equalization amount of approximately RM 2 billion. Of which RM 1.7 billion will come from DiGi as new debt, with a balance of RM 300 million from Telenor.
The merger will be named Celcom DiGi Berhad and aims to combine the resources of both parties to accelerate Malaysia’s digitization shift due to COVID-19. It will continue to be listed on Bursa Malaysia.
How will this affect customers?
Not much, really. Existing users will have the choice to keep their telecommunications brand, as the Celcom and DiGi brands will continue as they are after the merger.
Axiata and Telenor will develop 5G use cases to provide Malaysians with better connectivity, a necessary step for the adoption of 5G phones. They will also create something called the Innovation Center, which could play a direct role in building employee skills for the future economy.
“Digital aspirations and the growing demand for connectivity require significant investments,” said Dato ‘Izzaddin Idris, President and CEO of Axiata.
“In order to stay ahead of the game, we need to strengthen the foundation to deliver continuous high-quality broadband, improve 4G connectivity, and subsequently support the acceleration of 5G deployment.”
It will have around 19 million customers
Axiata said Celcom DiGi Berhad would be considered one of the leading telecommunications service providers in Malaysia in terms of value, revenue and profit, with pro forma revenue of around 12.4 billion RM, EBITDA before entity synergy combined to about 5.7 billion RM, and about 19 million customers.
The two parties also assured that no downsizing resulting from this merger will occur. Instead, it should create new opportunities for staff and develop them to acquire new skills in different areas.
Axiata and Telenor will work to finalize the deals by Q2 2021, adding that there is no certainty that these talks will result in a deal.
Editor’s Note: We have contacted Celcom for more information and will update the article once they respond.
- You can read more of what we wrote about Celcom here, and DiGi here.
Featured Image Credit: Celcom Axiata / DiGi
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