Issue 36

Axiata, Telenor to end talks on merging Asian telecom operations

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.

From – Deal Street Asia

AXA, Affin Bank explore options to sell Malaysian insurance business

French insurer AXA SA and Affin Bank Bhd. are exploring options including a potential sale of their life and general insurance business in Malaysia that could fetch about $650 million, according to people with knowledge of the matter. 

Kuala Lumpur-based Affin Bank and AXA are working with advisers on the potential deal, said the people, who asked not to be identified as the information is private. The financial firms are seeking around $500 million on AXA Affin General Insurance Bhd., while they are looking to raise as much as $150 million from AXA Affin Life Insurance Bhd in a transaction. Deliberations are at an early stage and the companies could decide to keep their holdings in the Malaysian business, the people said. 

A representative for AXA declined to comment, while a representative for Affin Bank didn’t immediately respond to requests for comment. Shares of Affin Bank closed 2% higher in Kuala Lumpur on Thursday, while AXA climbed as much as 1.4% in Paris. Affin and AXA could be joining owners of AmGeneral Insurance Bhd. as well as other foreign players including Prudential Plc and Zurich Insurance Group AG in seeking to pare stakes in their Malaysian units, after the government decided to start enforcing ownership cap more strictly. 

AXA Affin General Insurance is among the top medical and health insurers in Malaysia, with 5,000 agents across the nation. The company underwrote 1.44 billion ringgit ($341 million) in gross earned premiums and posted a net income of 100 million ringgit in 2018, according to its latest annual report. AXA Affin Life Insurance, set up in 2006, earned gross premiums of 463.4 million ringgit in 2018, down from 490 million ringgit a year earlier, its annual report shows. 

The company’s losses narrowed to 8.1 million ringgit from 17.7 million a year ago. AXA owns 49.99% of the Malaysian general business operations, while Affin Bank holds 49.95%, according to AXA’s website. In AXA Affin Life, Affin controls 51% and the rest belongs to the French insurer.

From – Deal Street Asia

Insignia Ventures invests in six Topica Founder Institute startups

Six startups incubated by Topica Founder Institute have received $50,000 each in seed funding from Insignia Ventures Partners, with three companies being in advanced talks for further financing. 

These include names such as on-demand telemarketing firm TelePro, referral recruitment platform Recruitery, travel ticket startup Cheep Cheep, drone delivery solutions provider Drone Pro, outdoor advertising firm Gigantec Media and enterprise software developer Clavis Aurea. 

These comprise the list of graduating startups from Topica Founder Institute’s seventh batch. The financings for the startups come from a blanket deal Insignia Venture Partners and Topica Founder Institute forged earlier this year to provide seed capital to the latter’s graduates. A slew of startups that have graduated from Topica Founders Institute’s previous courses have gone to raise follow-on funding rounds. 

These include names such as Appota, Beeketing, Logivan and Kyna. According to the accelerator, startups from its seven batches so far raised more than $40 million in funding at a combined valuation of over $300 million. Topica Founder Institute aims to establish a network that it calls ‘TFI mafia’, something people have seen in the Silicon Valley wherein founders and senior executives of tech giants established new companies. 

There are similar examples in Asia too. For instance, founders of Recruitery and fitness app WeFit left Topica and Ticketbox (acquired by Tiki) to set up their own ventures. “A lot of our founders have done very well and have helped other founders. This spirit of giving back and helping new entrepreneurs grow their startups is quite similar to the Silicon Valley mafias and will continue living,” Bobby Liu, director of Topica Founder Institute, told DealStreetAsia. 

He said that Vietnam currently has more than 1,000 early-stage startups, a number of which even started as early as from universities. “The number of investable early-stage startups is around 150-200, so it is quite healthy,” he said. Topica Founders Institute is the accelerator programme sponsored by Topica Edtech Group, which late last year raised a $50 million in Series D funding from Singapore-based private equity firm Northstar Group.

From – Deal Street Asia

Thailand drafts regulations to legalise ride-hailing services by early 2020

Thailand has drafted guidelines to regulate ride-hailing companies and aims to legalise the services by March 2020, the transport ministry said on Friday. 

Ride-sharing services exist in a legal gray area in Thailand, with police routinely stopping and fining drivers because they are not properly registered. The guidelines require private vehicles to be registered and equipped with a GPS system, the transport ministry said in a statement. 

Drivers will need a public driver’s license. Ride-hailing firms must verify the identities of drivers and operate a 24-hour complaint centre, the ministry said. “We have to look at what is possible within the law to give choice to the public – not increase competition with taxis in the system,” deputy permanent secretary Jirut Wisansitr told Reuters. 

Ride-booking services are popular in the nation of 67 million for being sometimes cheaper and less likely to refuse to take passengers to their destinations than regular taxis, but they have irked traditional taxi drivers. The proposed changes come after the Bhumjaithai Party campaigned in this year’s election on a promise to legalise ride-hailing services. 

The party won enough seats to join a coalition government and was given responsibility for the transport ministry. Some ride-hailing companies have been operating in Thailand‘s unregulated market for a few years now. 

Singapore-based Grab offers rides in cars and on motorcycles, while its rival Get, a unit of Indonesia’s Go-Jek, only offers motorcycle rides. Thai companies have also invested in ride-sharing startups.

From – Deal Street Asia

Mitsubishi invests in Finnish app Whim that wants to replace car ownerwhip

Mitsubishi Corp. joined Toyota Financial Services as an investor in a Finnish firm that seeks to offer a viable alternative to car ownership. The Tokyo-based company has bought shares in MaaS Global Oy, the Helsinki-based company behind the Whim mobile application, in its latest funding round that is set to be closed within a few weeks, according to Chief Executive Officer Sampo Hietanen. 

Before this round, Whim had collected about 24 million euros ($26 million) from investors, it said in April. MaaS Global has been looking for “strategic” investors who bring in “not just money but something extra,” Hietanen said by phone. 

He is banking on learning from Mitsubishi how to incorporate local know-how with global reach and how to negotiate with various parties within the transport ecosystem that can encompass multiple transport services from buses, city bikes, ride-sharing and taxis to rental cars. 

MaaS Global pioneered its mobility-as-a-service business in the Finnish capital, where it launched in 2017. In Helsinki, users can choose a monthly subscription that includes unlimited public transport, 10-euro taxis over short distances, the use of city bikes and cheaper car rentals. A subscription with unlimited rental cars, short-distance taxis and public transport costs 499 euros a month. 

Whim also operates in Birmingham, U.K., and Antwerp, Belgium. Next in line are Vienna, Singapore and cities in Japan, Hietanen said. Before unveiling the service to masses, Whim will pilot with smaller user numbers in each market to “focus on the user experience to really get it right,” he said. MaaS Global expects to open in Miami, Vancouver and Chicago in 2020. In Helsinki, the service is evolving to a new pricing model next quarter. 

After first introducing a pay-as-you-go model and then moving into packaging mobility in monthly subscriptions, Whim will launch packages where the price is dependent on service levels it says better compare with private car ownership. 

“This is what a car tends to represent to people, it’s this promise of freedom to go anytime, anywhere on a whim,” Hietanen said. “We really need to concentrate on delivering that.”

From – Deal Street Asia
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