OSLO, June 21 — Malaysian telecoms firm Axiata Group Bhd and Norway’s Telenor ASA have agreed to merge their mobile operations in Malaysia, forming a new market leader in the southeast Asian nation, the two firms said today.

The planned transaction, which remains subject to regulatory and other approvals, is expected to be completed by the second quarter of 2022, the firms said.

Telenor and Axiata will each own 33.1 per cent of the merged firm Celcom Digi Berhad, which will remain listed in Kuala Lumpur, in line with a preliminary agreement announced in April.

As a result of the deal, the companies plan cost cuts and savings on capital expenditure with a net present value amounting to about US$2 billion (RM8.3 billion), Telenor said in a statement.

Axiata in a stock exchange filing said it entered into the agreement with Digi, where 100 per cent equity interest of its Malaysian unit, Celcom Axiata, would be transferred to Digi for a total consideration of RM17.76 billion.

Digi said the merger would 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 company.

"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,” it said in a statement.

Digi said the signing followed satisfactory completion of the due diligence processes.

Axiata said last Tuesday it hoped to seal the merger deal within days or a week having completed due diligence. — Reuters