Norway’s Telenor and Malaysia’s Axiata pull plug on Asian telecom tie-up

OSLO/KUALA LUMPUR: Telenor and Malaysia’s Axiata Group have ended talks to create a telecoms joint venture with nearly 300 million customers across South Asia and Southeast Asia in a blow to the Norwegian group’s growth strategy and shares. Shares in Telenor, which has expanded in Asia in pursuit of growth outside its mature home market in Scandinavia, fell on Friday’s announcement by the two companies that talks were over. “This removes the prospect for $5 billion of potential deal synergies,” brokerage Jefferies said in a research note. Telenor sold its central European operations last year as it seeks to focus on its Nordic and Asian businesses.
The proposed non-cash combination of Telenor’s telecom and infrastructure assets in Asia with Axiata’s would have had operations in nine countries including Thailand, Malaysia, Bangladesh, Pakistan and Indonesia, with a total population of nearly 1 billion people. Failure of the talks also highlights the difficulty of merging phone operators around the world and the growing problems it presents for investors. The joint venture would have competed with firms such as Singapore Telecommunications and created an entity worth $40 billion including debt, sources say. — Reuters