By Business Desk in Petaling Jaya/The Star | Asia News Network
Petaling Jaya (The Star/ANN) - Telecommunication giant Axiata Group Bhd is set to strengthen its foothold in Cambodia through a merger between Hello Axiata Co Ltd and Latelz Co Ltd, which it acquires for a consideration of US$155 million (473 million ringgit).
In a statement, Axiata announced that its Cambodian arm had entered into a sales and purchase agreement to acquire shares of Latelz, owned by Timeturns Holdings Ltd based in Cyprus.
Post merger, Axiata will hold a 90 per cent stake in the combined entity and emerge as one of the largest operators in Cambodia in terms of subscribers and revenue.
"Unique subscriber penetration in Cambodia is currently below 40 per cent with an expected double-digit growth of around 10 per cent over the next three years. As such, the headroom for growth is now and with this merger, Axiata will have a head start with a significantly-strengthened entity and clear market leadership," the company said.
It also said the consolidation would provide improved economies of scale, remove duplicative costs and enhance revenue potential, amongst other benefits.
"The merged entity will also facilitate synergies and the sharing of best practices between the two companies. This will include increased spectrum and significant synergies across network coverage and infrastructure," the telco said.
The acquisition of Latelz will be financed by Axiata's internal-generated funds and/or existing financing facilities and is not expected to have any material effect on the gearings and net assets of Axiata Group for the financial year ending Dec 31, 2012.