Axiata Group and Telenor Group have agreed to drop their plans to combine their telecom business in Asia.
Over the last four months, both parties have 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. The parties do not intend to provide further comments.
Telenor was planning to hold 56.5 percent and Axiata 43.5 percent stake in the merged business. The telecoms giant in South and Southeast Asia would have nearly 300 million customers in nine countries.
The merged group would be worth $40 billion, including debt. The merged company will be among the top three operators in the nine markets. The merged company would have around 60,000 towers across Asia.
Telenor last year sold its central European business, seeking to consolidate its operations around a Nordic and an Asian unit. Last month, it bought a $1.7 billion majority stake in Finland’s DNA.
Annual pro-forma revenue for the merged company was estimated at $13 billion, with earnings before interest, tax, depreciation and amortization of $5.5 billion before savings are realized. The companies expect the combined group to generate savings of around $5 billion.