Axiata Group Bhd. and Telenor ASA agreed to end talks on merging their Asian telecommunication operations, scrapping an effort to create a company with 300 million customers across nine countries.
Both companies agreed to end discussions, Oslo-based Telenor said in a statement Friday, confirming an earlier Bloomberg News report. Telenor cited “complexities” as the reason for the halt, without elaborating. Telenor shares slid as much as 7% in early Oslo trading.
Axiata said it would explore opportunities to consolidate and optimize its business. Hanne Knudsen, Telenor’s spokeswoman, said by phone that it would now be “business as usual” for the company in Asia, while not ruling out that talks could be picked up again later.
The decision to quash the deal comes months after Malaysian Prime Minister Mahathir Mohamad questioned how combining the companies would affect employment. Telenor had cited about $5 billion in synergies from the combination, which would have created a company with $13 billion of sales. The Norwegian telecom company was to have owned 56.5% of the merged entity under the plan.
Axiata’s board met Friday to discuss the planned merger and decided to cancel the deal, said a person familiar with the talks, who asked not to be identified as the matter is private.
Trading in Axiata shares was halted earlier, pending an announcement.
The companies had planned to have a final agreement on the deal by the third quarter, with Axiata Chief Executive Officer Jamaludin Ibrahim saying last month that the company was still sticking to its timeline for signing the agreement. He cautioned that while most mergers center on commercial interests, this one involves national interest and staff issues as well.