Malaysia’s Axiata to refrain from M&A deals after Telenor talks collapse

FILE PHOTO - A security officer guards in front of the Axiata headquarters building in Kuala Lumpur May 28, 2014. REUTERS/Samsul Said

Axiata Group Bhd. will refrain from undertaking mergers and acquisitions in the near term as Malaysia’s biggest wireless carrier looks to improve its operations, people with knowledge of the matter said.

The decision was made at a board meeting last week and follows the collapse of talks for a merger with Telenor ASA’s Asian business, said the people, who asked not to be named as the information is private. Axiata won’t proceed to formal negotiations for any approach for its $3 billion wireless tower business or its Indonesian telecommunications operations at least before the end of the year, the people said.

Hong Kong’s CK Hutchison Holdings Ltd. has informally expressed interest in exploring a combination of its Indonesian wireless business with the Malaysian carrier’s local unit, PT XL Axiata, people familiar with the matter have said. Axiata’s Chief Executive Officer Jamaludin Ibrahim said in a September interview that tower business unit Edotco Group Sdn. has received some takeover interests, confirming an earlier Bloomberg report.

Axiata, which counts Malaysia’s sovereign wealth fund Khazanah Nasional Bhd. as its major shareholder, may revisit some of the offers next year when it is on a stronger footing, the people said. The company is expected to report a 1.2 billion ringgit ($285 million) net income this financial year, a turnaround from a loss of 5 billion ringgit in 2018, according to the average of analyst estimates polled by Bloomberg.

The pause on deals echo with Jamaludin’s remarks that the telecom giant will keep focusing on operational efficiency as the industry is slowing down, while mergers remain a key strategy in the longer term. It also comes after Axiata and Telenor last month mutually ended talks on combining their Asian operations to create a company with $13 billion in sales and with 300 million customers across nine countries.

Axiata’s top priority is to focus on delivering on its goals of profitability and cash generation, while consolidation remains important to the company’s growth strategy in some markets, a representative wrote in an emailed response to Bloomberg.

“We wish to stress we are not compelled to secure deals but are cognizant that the process of consolidation takes up to a year to conclude and another two to three years to reap its synergies,” the representative said. “Therefore, discussions on potential strategic partnerships should begin now.”

Bloomberg

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.