Axiata and Telenor Asia have officially revealed that they are now in advanced talks to merge their telco operations, Celcom and Digi into one entity. The joint announcement has confirmed the speculations that were sparked by the temporary suspension of Axiata and Digi share trading on Bursa Malaysia earlier today.
The merged company will be officially called Celcom Digi Berhad but both Celcom and Digi will continue to be two different telco brands in the market. There will be no effect on existing MVNOs arrangements for both companies as well.
That being said, the current CEO of Celcom, Idham Nawawi has been nominated as the CEO for the newly merged company while Digi’s CEO, Albern Murty will become its Deputy CEO.
In terms of ownership, Axiata and Telenor will each own 33.1% of the new entity which means that they will control the Celcom Digi Berhad together. The rest of the shares will be owned by other local institutional funds such as EPF, PNB, and KWAP as well as the public.
Axiata and Telenor have also guaranteed that there is no plan to cut jobs or perform forced retrenchments on the existing staff at Celcom and Digi. However, those that have overlapping positions will be offered new roles or retraining and upskilling opportunities which are related to the establishment of the new Innovation Centre that was revealed in today’s announcement.
Nevertheless, Axiata and Telenor also didn’t discount the possibility of a Voluntary Separation Scheme being offered to the employees of both telcos.
Izzadin Idris, the President & Group CEO of Axiata pointed out today’s announcement does not involve a binding agreement and there is still a lot of work to be done in order to finalize the merger. Additionally, the merger is also still subjected to approvals from the regulators and shareholders of respective companies.
Nevertheless, the definitive agreement is expected to be ready within the second quarter of 2021. Both parties also seemed to be confident that the merger will really take place this around as opposed to what has happened back in 2019.