Malaysian Prime Minister Mahathir bin Mohamad has called for assurances that the proposed merger of Axiata and Telenor will not result in local job losses.
The companies have confirmed that they are in talks over a possible combination of their Asian operations. If an agreement were reached, the merged company would be headquartered in Kuala Lumpur - much like Axiata Group – but Telenor would hold the majority stake in the business.
Telenor’s Asian headquarters are in Singapore, which has prompted concerns that a merger could lead to job cuts in Malaysia. The Prime Minister has requested further details on this matter, which could factor into the ultimate decision over whether to approve the deal as the merger would need approval from Malaysia’s regulator and telecom authorities.
Axiata has previously stated that the deal would not require any forced redundancies, but told Bloomberg that it would allow employees to opt for a voluntary “separation scheme” if they desired. The group’s CEO Jamaludin Ibrahim said that for the next three months, Axiata would have a team dedicated to addressing the logistics of the proposed merger before a decision is reached in Q3.
If the merger goes ahead, the newly created unit would be one of the biggest telecom groups in Asia, with 300 million subscribers and 60,000 towers.