Benzinga | Jun 21, 2021 09:42AM EDT

Axiata, Telenor Partner To Merge Malaysian Operations In $12.1B Deal: Report

* Axiata Group Bhd (OTC:AXXTF) and Telenor ASA (OTC:TELNF) (OTC:TELNY) collaborated to combine their Malaysian mobile operations, Bloomberg reports.

* The deal is valued at $15 billion, Reuters reports.

* In April, the companies announced advanced discussions to merge Celcom and Digi.

* Axiata will transfer its stake in Celcom Axiata Bhd. to Digi.com Bhd (OTC:DIGBF) for 17.8 billion ringgits for shares and 1.7 billion ringgits in cash from Digi, and 300 million ringgits from Telenor. The merged entity will have a "pre-synergy equity value" of 50 billion ringgits ($12.1 billion).

* Axiata and Telenor will have equal ownership of 33.1% each in the entity known as Celcom Digi Bhd. The entity will have an estimated subscriber base of 19 million, revenue of $3 billion, and profit of $1.4 billion. The arrangement is estimated to lead to cost and Capex synergies of 2 billion ringgits on a net present value basis.

* Celcom Digi's main competitor will be Maxis Bhd (OTC:MAXSF).

* The transaction is estimated to complete by Q2 of 2022.

* Celcom Digi will also dedicate 250 million ringgits over five years to build an innovation center in the capital city of Kuala Lumpur.

* Price action: TELNY shares closed lower by 1.95% at $16.68 on Friday.