Digi.Com Berhad (KLSE:DIGI) entered into an agreement to acquire Celcom Axiata Berhad from Axiata Group Berhad (KLSE:AXIATA) for MYR 18.2 billion on June 21, 2021. Under the terms, Axiata will transfer 1,237,534,681 ordinary shares in Celcom to Digi and Digi will issue 73,378,844 fully paid-up new ordinary shares to Telenor Asia as nominee of Axiata subject to, amongst others, the payment by Telenor Asia to Axiata of a cash consideration of MYR 297.9 million; 3,883,129,144 fully paid-up new ordinary shares to Axiata and a cash payment of MYR 1.7 billion to Axiata. Upon completion of the transaction, Telenor Asia and Axiata will each have equal shareholding of 33.10% in Digi. Digi intends to fund the Cash Consideration through internally generated funds and/or bank borrowings. Upon completion of the Proposed Merger, the composition of the Board of Digi is expected to be changed to reflect the participation of Axiata and Telenor Asia as controlling shareholders. Mohamad Idham Nawawi and Albern Murty will be appointed as Chief Executive Officer and Deputy Chief Executive Officer of the merged company respectively. Post completion of transaction, the name of “Digi.Com Berhad” will be changed to “Celcom Digi Berhad”, after receiving approvals from shareholders.

In 2020, Celcom reported revenue of MYR 6.2 billion, profit before tax of MYR 855.7 million, Profit attributable to owners of MYR 677.4 million, EBITDA of MYR 2.6 billion, total equity of MYR 299.5 million, total assets of MYR 12.6 billion. The Implied EV/FCF multiple is 15.3 times, Implied Price-to-earnings (“P/E”) multiple is 26.2 times, and Implied EV/EBITDA multiple is 9.5 times. The transaction is subject to approval from non-interested shareholders of Digi, shareholders of Axiata, Securities Commission Malaysia, Bursa Securities, Minister of Communications and Multimedia, lenders/shareholders of Axiata or Celcom, Bank Negara Malaysia and any other relevant parties and/or authorities. On November 24, 2021, Digi has engaged with Malaysian Communications and Multimedia Commission to initiate the merger assessment process. High Court of Malaya has granted an injunction which prohibits Axiata from including Celcom Mobile's shareholding in Tune Talk from being included in the proposed sale. On April 4, 2022, A 'Statement of Issues' ('SOI') has been sent by the Malaysian Communications and Multimedia Commission (MCMC) to both Celcom and Digi, related to the duo's proposed merger. Celcom's parent company Axiata noted that this SOI sets out the MCMC's preliminary view on competition effects that could arise from the tie-up, and invites Celcom and Digi to submit comments, information and remedies on the assessment. The transaction is expected to close by the second quarter of 2022. As of June 17, 2022 CIMB Investment Bank Berhad wishes to notify that Digi and Axiata have agreed to extend the date from June 21, 2022 to December 31, 2022. As of June 29, 2022, Malaysian Communications and Multimedia Commission has approved the transaction. As of July 28, 2022, Pursuant to Paragraph 9.17A under Part III (Submission and Implementation) of the Equity Guidelines issued by the SC, where 6 months have lapsed from the date of application, Digi will be required to submit a new application to the SC in relation to the Proposed Merger if it intends to proceed with the proposal. In view that the Malaysian Communications and Multimedia Commission's authorization decision and notice of no-objection to the Proposed Merger was issued on June 28, 2022 (“MCMC Decision”), an application was made thereafter to the SC to seek a relief from complying with the Requirement 9.17A, to facilitate necessary updates to the SC Application taking into consideration the outcome of the MCMC Decision. As of July 28, 2022, the transaction is expected to be closed in the second half of 2022. As of September 15, 2022, Digi and Celcom have received clearance from the Securities Commission Malaysia (SC). The completion of the proposed transaction will now be subject to approval of Bursa Malaysia and Axiata and Digi shareholders. As of November 18, 2022, the shareholders of Axiata and Digi have approved the merger. The transaction is expected to close within year end.

CIMB Group Holdings Berhad (KLSE:CIMB) acted as financial advisor to Digi. Morgan Stanley and Maybank Investment Bank Berhad acted as financial advisor for Axiata. James Mythen and Michael Reede of Allen & Overy is advising Telenor Digi.Com Berhad largest shareholder. Chin Yeoh, Ronnie King, Tom Connor and Myfanwy Wood of Ashurst LLP served as legal advisors to Digi.Com Berhad. AmInvestment Bank Berhad and CIMB Investment Bank Berhad acted as financial advisors and Christopher & Lee Ong acted as legal advisor to Digi.Com Berhad. Adnan Sundra & Low acted as legal advisor and Tricor Investor & Issuing House Services Sdn Bhd acted as registrar to Axiata Group Berhad.

Digi.Com Berhad (KLSE:DIGI) completed the acquisition of Celcom Axiata Berhad from Axiata Group Berhad (KLSE:AXIATA) on November 30, 2022.