Axiata Group Bhd. and Norway’s Telenor ASA signed a definitive agreement to combine their Malaysian mobile operations in what is the biggest telecom transaction in the southeast Asian country.

Axiata said its entire stake in Celcom Networks Bhd. will be transferred to Bhd. for 17.8 billion ringgit, according to an exchange filing on Monday. The merged entity will have a “pre-synergy equity value” of close to 50 billion ringgit ($12.1 billion).

A formal agreement, first reported by Bloomberg News, comes after Axiata and Telenor announced in April that they were in advanced discussions to merge Celcom Networks Bhd. and Bhd. that could create Malaysia’s biggest cellphone operator by subscribers.

The merger will also become the nation’s largest telecom deal on record, surpassing Binariang GSM Bhd.‘s 2007 acquisition of Maxis Communications Bhd. in a 41 billion ringgit deal, according to data compiled by Bloomberg.

Axiata and Telenor will have an equal ownership of 33.1% each in the merged entity to be known as Celcom Digi Bhd., which will have a subscriber base of 19 million and pro-forma revenue of 12.4 billion ringgit.

Shares in Axiata fell 1.5% at the midday break in Kuala Lumpur after losing as much as 4.2% earlier. shares climbed 3.1%. – (Bloomberg)


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