It also said the proposed merged company will be listed on Bursa Malaysia and an international exchange, with its headquarters in Kuala Lumpur.
Telenor said it hopes MergeCo will be a “leading, well-diversified Pan-Asian telco”, adding that it will operate out of nine countries serving a total population of close to one billion.
“I am confident this will create significant value for shareholders and will be beneficial to our customers,” said Sigve Brekke, president and CEO of Telenor Group.
MergeCo will have approximately 300 million customers and become one of Asia’s largest mobile infrastructure companies operating approximately 60,000 towers across Asia.
Telenor said the merger would bring together “two strong organisations”, referring to Celcom and Digi.
“By uniting two strong organisations with complementary footprints and a merger of equal spirit, there will be attractive opportunities to capture substantial synergies preliminarily estimated at around US$5 billion in total, support future investments and create shareholder value,” it added.
Telenor said the merger would lead to the establishment of a centre for state-of-the-art technologies such as 5G, Internet of Things and Artificial Intelligence.
It said it hopes to finalise merger talks within the third quarter of 2019 following due diligence.
Telenor’s Asian footprint includes Thailand, Malaysia, Bangladesh, Pakistan and Myanmar, while Axiata has operating companies in Malaysia, Bangladesh, Cambodia, Nepal, Sri Lanka and Indonesia, and tower business edotco.
Pro-forma revenue and pre-synergy earnings before interest, tax, depreciation and amortisation of the combined entity are approximately US$13 billion (around RM52 billion) and US$5.5 billion (around RM22 billion).
Both companies are expected to make a material announcement at 4pm today.