After recent reports suggested that the merger between Telenor and Axiata has hit a snag, Axiata Group Bhd president and group chief executive officer (CEO) Tan Sri Jamaludin Ibrahim has reassured the public that a deal is still very much in the works. With due due diligence for the potential merger 70% done, he predicted that talks should conclude by November of 2019.
Sources earlier raised potential issues surrounding the merger, including disagreements over equity share and the potential relocation of the combined entity from Kuala Lumpur to Singapore. However, the CEO brushed these aside, explaining:
“This is the single biggest M&A (merger and acquisition) in 20 years in the whole region, except North Asia. This is huge, unheard of. It’s not about problems, it’s about complexity.”
He also stated that there would be minimal change to top management positions or to the shareholding structure of the combined entity, which also form part of the alleged set of issues holding up the deal.
It must be noted that there are a total of 14 entities across 9 countries that are involved in the potential merger, and that has added to the complexity of negotiations thus far. However, a key aspect is also national interest, with a source earlier saying that “we are nationalists”, and that Celcom (a subsidiary of Axiata Group) staff fearing for their jobs after the initial announcement of the merger was made.
As such, Tan Sri Jamaludin has said that there is still a lot to be agreed upon with respect to that—however, the deal is 90% done as for the commercial aspect of the merger. As of yesterday at 3:15pm, Axiata shares were valued at RM5.03, with puts the overall value of the company at RM45.83 billion. A merger with Telenor would reportedly mean a revenue of RM50 billion and a net profit of RM4 billion for the combined entity.