Telenor ASA — M&A Activity 2022

Nov 30, 2022

Merger between Digi and Celcom in Malaysia completed

Merger between Digi and Celcom in Malaysia completed

Telenor, Axiata and Digi have today completed the merger of the telecommunication operations of Celcom Axiata and Digi. The new company will be named Celcom Digi and will continue its Digi listing on Bursa Malaysia. The closing of the transaction represents another step in the execution of the mid-term strategy presented at the Telenor Group capital markets day in September.

On completion, Axiata received newly issued Digi shares representing 33.10 percent of the enlarged share capital of Digi, and a cash consideration of MYR 2.5 billion funded by Digi and to be assumed by the merged entity. Digi also issued shares to Telenor to reach equal ownership following Telenor's payment of MYR 0.3 billion to Axiata.

Celcom Digi will be the largest listed technology company on Bursa Malaysia. On a pro forma basis for the financial year 2021, Celcom Digi will serve an estimated 20 million customers with an EBITDA of around MYR 5.8 billion (around NOK 12.8 billion). The company remain committed to the previously announced synergy target with net present value of MYR 8 billion (around NOK 18 billion).

Digi will be deconsolidated and accounted for as an associated company in Telenor ASA books as of November 30 and all historical accounts will be re-presented, presenting Digi as discontinued operation. The new associate, Celcom Digi will be recognised based on the market value on 1 December 2022 and accounted for under the equity method going forward. Based on book values of Digi as of 30 September 2022 and market value of Digi as of 30 November 2022, Telenor estimate a gain of around NOK 30 billion to be recognised in Q4 2022. All things being equal, deconsolidating Digi will increase Telenor Group’s net debt to EBITDA ratio by around 0.1x.

Telenor Group Pro forma results excluding Digi (NOK million)

Revenues EBITDA boi

Q421 24 865 10 148

Q122 23 811 10 055

Q222 24 713 10 820

Q322 25 028 11 352

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