Axiata, Telenor Asia, and Digi have officially signed the agreement to merge Celcom and Digi into a single company. Today’s revelation is a follow up to the announcement that Axiata and Telenor have made back in April.
However, the completion of the merger is still subjected to approvals from the shareholders of Axiata and Telenor as well as other related elements including regulatory approvals. Nevertheless, they expect that the merger will be completed by the second quarter of 2022.
In general, the announcement is meant to inform everyone that the merger is now happening for real while the majority of the details had been revealed back in April. For example, Axiata and Telenor will have equal shares of 33.1% each in the merged company which will be called Celcom Digi Berhad.
Once the merger is completed, Axiata will also receive RM 2 billion of cash consideration with RM 1.7 billion of the amount to come from Digi as debt in the new merged company while another RM 300 million will come from Telenor. The same goes for the top management team of the new company which will still follow the arrangement that was announced back in April:
Axiata and Telenor once again insist that there will be no forced retrenchments although previously, they did not discount the possibility of offering the Voluntary Separation Scheme option to the employees of both telcos. The merged company has also planned to build an Innovation Centre in Kuala Lumpur for R&D, 5G use cases, and digital startups through a total investment of up to RM 250 million over a period of five years.
The statement didn’t highlight this but back in April, both companies pointed out that Celcom and Digi would continue to be in the market as two different brands. It goes without saying that everyone is eager to know the real impact of this merger on the customers of both telcos but that is something that we will likely only be able to see once the deal is completed next year.