The Celcom and Digi merger is in its final stages after obtaining approval from their shareholders. The board of directors of Axiata Group Berhad and Digi Telecommunications made their announcements after their Extraordinary General Meeting (EGM) today.
According to Axiata’s statement, the outcome of the EGM by poll vote has been submitted to Bursa Securities (Bursa) as required by the applicable regulations. It added that the merger moves closer to completion, having previously cleared the Malaysian Communications and Multimedia Commission (MCMC), the Securities Commission and Bursa prior to this EGM.
Meanwhile, Digi said the approval by both Digi’s and Axiata Group Berhad’s shareholders is one of the final steps in the proposed merger approval process, having previously been cleared by the MCMC, the Securities Commission and Bursa Malaysia. Once the merger is completed, Axiata and Telenor will hold equal ownership of 33.1% each in the newly merged company which is proposed to be named Celcom Digi Berhad.
The current attempt to merge Celcom and Digi was announced in April last year and it would form the largest telco in Malaysia when the merger process is targetted to be completed by end of 2022. Besides Telenor and Axiata, other Malaysian institutional funds such as EPF, PNB, KWAP and the public will own the remaining 33.8% stake in Celcom Digi Berhad.
To address anti-competitive concerns, Celcom and Digi have agreed to several undertakings outlined by the MCMC. This includes returning a total of 70MHz of spectrum over a 3-year period, divesting Yoodo and to establish an independent business unit to manage Mobile Virtual Network Operators (MVNO) to ensure clear separation from Celcom Digi Berhad’s retail mobile business. On top of that, Celcom and Digi must also remove exclusive distributor arrangements in several states and to position both products under a single corporate brand.
Celcom and Digi are among the four telcos that have signed the Share Subscription Agreement to take an equity stake in Digital Nasional Berhad. Because of the impending merger, both telcos are only allowed to take a stake of 12.5% each as the merged entity would not be allowed to hold more than 25% share holding in the 5G single wholesale network.
Both Celcom and Digi currently offer 5G services to consumers via the 5G national network after signing a 10-year 5G access agreement.
