Telekom Malaysia yesterday overcame the final barrier to creating the country's biggest mobile communications firm when it won shareholders' approval to take over Celcom Malaysia.

Managing director Mohamad Khir Abdul Rahman said shareholders at a special meeting here gave the nod for Telekom to buy out all other Celcom investors at RM2.75 a share.

The offer was expected to be completed in June, paving the way for the merger between Celcom and Telekom's mobile unit TM Cellular to be completed in 18 months, Khir told reporters.

Celcom shareholders approved the deal o­n March 20, despite opposition from Deutsche Telekom which has filed for international arbitration and sought damages.

Deutsche, which owns eight percent of Celcom, the country's second biggest mobile phone operator, bought the shares in 1996 at nine ringgit each and has been holding out for a higher price.

Moving towards mobile monopoly

The news led Telekom and Celcom shares to rise in early trade Monday but both closed flat at RM7.15 and RM2.68 respectively.

Khir said he believed investors should be "quite happy" to sell their Celcom shares at RM2.75, which was slightly higher than the current market price, in view of weak global sentiment.

State-owned Telekom would next week unveil its plans to integrate the cellular network's marketing and business operations as well as to redeploy staff, he said.

Celcom's chief executive Ramli Abas would lead the merged entity.

Telekom has already spent some RM1.5 billion for its existing 31 percent stake in Celcom and plans to issue around four billion ringgit in bonds to finance the acquisition.

The merger would create the country's biggest mobile phone firm, surpassing Maxis Communications, with a subscriber base of more than three million and a 40 percent market share. AFP