Malaysia’s Digi and Celcom close to merger deal

Malaysia’s Digi and Celcom close to merger deal

Is the deal to merge the Malaysian mobile operations of telecoms firms Axiata Group Bhd and Norway's Telenor ASA finally done?

Axiata's CEO Izzaddin Idris has been quoted as saying the two companies’ Malaysian mobile operations will be merged within days. Both companies have concluded the due diligence process and are hopeful of signing an agreement soon, according to Reuters.

The two companies are Malaysia's second and third-largest mobile services providers, and shareholders have, not too surprisingly, reacted favourably to the proposed deal. Axiata has said will help restore long-term growth and profitability to the industry in Malaysia.

Axiata and Telenor announced in April that they were in advanced talks to combine their MNOs – Celcom Axiata Bhd and Telenor's DiGi.Com Bhd – to create the top player in Malaysia's highly competitive sector. The two companies will each own about 33.1 percent of the merged entity, which will be known as Celcom Digi Berhad. While the deal will be sealed fairly quickly, the merger could take nine to 12 months, depending on regulatory approvals.

There is no shortage of mobile operators in Malaysia right now – seven at the last count – although the top four – Digi, Maxis, Celcom and UMobile – dominate the market with well over three quarters of total subscriptions.