Norwegian Wood, 18 June: It's not a done deal yet. In other words, a lot of things can happen that may make the proposed Malaysia-Norway telco deal NOT happen. For example, the PMO may (or may not) ask that it be put on hold, y''know. The Prime Minister, after all, was reportedly anxious about job losses resulting from the merger. And Norway is not the friendliest when it comes to our precious palm oil.
But, honestly, before reading this statement by Gobind, I had the impression that the Telenor-Axiata merger was in the advance stages. That's because quite a lot of details had been reported in the media. For example, Telenor was to own 56 per cent of the merged entity and Axiata the remaining 44 per cent (which means it will no longer be a Malaysian company even if the CEO and the Chairman are Malaysians). We also learned that no Malaysians will lose their jobs against their will (only VSS will be offered). And we were assured that the Malaysian telco industry and economy will benefit tremendously from the merger. [For other details of the proposed deal, read the announcement].
Now, thanks to Gobind, it is now being re-emphasised that the merger proposal is "still at proposal stage". If there was a preliminary agreement if was probably oral, it's quite certain that there has been no due diligence, but for sure a lot of media "play".
|Axiata-Telenor merger still at proposal stage, says Minister
In 2000, many will still remember, Singapore Telecom came so close to buying from Malaysia's troubled Renong 14.5 per cent of its subsidiary Time Engineering. Both companies had reached "preliminary agreement" on the deal, just awaiting regulatory approvals form both countries and a due diligence on Time Engineering before the deal could be sealed.
And then the deal simply unhappened. It was stopped by none other than Dr M, who chuckled something about his worry that the Singapore telco giant might "sing and tell" and the whole deal fell through. The real reason was Mahathir just wouldn't sell to Singapore out of pride - the nation's and of course his own. Analysts gave other excuses, one of them was the deal would put too much pressure on Telekom Malaysia.
We were talking about a mere 14.5 per cent then. Today, these people sponsoring the Telenor-Axiata deal are talking about selling off 56 per cent. 56.5 per cent, to be exact. Now, what are the chances the talk will go beyond the proposal stage, you think?