KUALA LUMPUR: Axiata Group Bhd and Telenor ASA have mutually agreed to end discussions regarding a non-cash combination of their telecom and infrastructure assets in Asia.
Axiata said over the last four months, both parties had been working on due diligence and finalising transaction agreements to be completed within the third quarter of 2019.
“Due to some complexities involved in the proposed transaction, the parties have mutually agreed to end the discussions.
“Both parties still acknowledge the strong strategic rationale of the Proposed Transaction. The parties do not rule out that a future transaction could be possible,” it said in a statement today.
Axiata chairman Tan Sri Ghazzali Sheikh Abdul Khalid said the board had acknowledges the strong strategic rationale of the proposed transaction and was equally cognisant of the level of complexity of such a deal that extends across nine countries and 14 major entities.
“Regardless of the expressed synergies of the merger, we are confident that the termination of the proposed transaction does not affect the group in achieving its Digital Champion ambitions.
“On behalf of the board of Axiata, we are grateful for the support of the government of Malaysia, our investors and all of our employees during this process,” he said.
Axiata president and group chief executive officer Tan Sri Jamaludin Ibrahim said the group continued to be a growth story and remained one of the largest mobile operators in the region.
“Today, we are operating from a position of strength, with all eight OpCos performing well and looking cautiously optimistic to meet our 2019 KPIs (key performance indicators).
“Moving forward, we are transforming into a digital technology company in what can be described as an increasingly converged global industry, branching out beyond mobile and consumer to home broadband, enterprise, digital and TowerCo.
He added that Axiata would continue to actively explore possible consolidation and portfolio optimisation opportunities to extract synergies, maximise efficiency and fund future growth areas.
Axiata said the termination of the proposed transaction would not in any way affect the group in its ability to achieve its Digital Champion aspirations by 2022.
“Operating from a position of strength, Axiata is confident in its capacity to leverage opportunities across the consumer, home, enterprise/IoT, digital and TowerCo businesses as the industry globally moves towards convergence,” it said.
As evident in its first half (1H) 2019 results, Axiata said its “Shifting Gear” focus towards profitable growth and cash generation continues to demonstrate excellent momentum and growing confidence in the group’s profit outlook.
The group returned to the black in 1H ended June 30 2019, with a net profit of RM913.15 million from the net loss of RM3.5 billion recorded a year ago.
This was on the back of double-digit growth at Robi Axiata Ltd, PT XL Axiata Tbk, edotco Group Sdn Bhd and Smart Axiata Ltd, as well as cost excellence initiatives across the group.
Its revenue increased four per cent to RM12.1 billion from RM11.62 billion, driven by positive contributions from all operating companies with the exception of Celcom Axiata Bhd and Ncell Pte Ltd.