Digi signs share purchase agreement with Axiata, paving the way for proposed merger of telco operations with Celcom

Subang Jaya, 21 June 2021 – The Board of Directors of Digi.Com Berhad announced in a filing to Bursa Malaysia today that the company has signed a conditional share purchase agreement (“SPA”) with Axiata Group Berhad (“Axiata”), as part of the prior-announced proposed merger of telecommunications operations Celcom Axiata Berhad (“Celcom”) and Digi Telecommunications Sdn Bhd (“Digi”). This signing follows the satisfactory completion of due diligence processes, allowing the parties to now move into the next phase of the proposed transaction.

The merger of Celcom and Digi will result in Axiata receiving newly issued shares in Digi and a cash consideration of RM1.7 billion from Digi as new debt in the merged entity. As part of an ownership equalisation in Digi under the terms of the merger, Axiata will also receive close to RM300 million from Digi’s largest shareholder Telenor Asia (“Telenor”). At completion, Axiata and Telenor will hold equal ownership of 33.1 percent each in the new merged company (“MergeCo”), which will be named Celcom Digi Berhad and will continue to be listed on Bursa Malaysia.

The completion of the proposed transaction will be subject to approval by Axiata and Digi shareholders, receipt of regulatory approvals, and other customary terms and conditions.

The new merged company will provide better network quality and coverage and have greater scale to invest, drive 5G solutions, catalyse new growth opportunities for large enterprises and SMEs, and attract and partner global digital giants in support of JENDELA and MyDigital aspirations. The new merged company will also leverage on combined economies of scale, while creating benefits through strengthening core distribution, delivering improved network operations, and realising efficiencies from operational activities.

Digi has been informed that as part of this announcement, Axiata and Telenor aspire for MergeCo to invest, subject to relevant approvals, up to RM250 million over 5 years in building a world-class innovation centre in Kuala Lumpur. Axiata and Telenor had also announced that initial estimates indicate synergies of around RM8 billion on a net present value basis.

Further details may be found in a related announcement on http://www.telenor.com/media.