Malaysian telecoms firm Axiata Group Bhd and Norway's Telenor ASA have agreed to merge their mobile operations in Malaysia, forming a new market leader in the Southeast Asian nation, the two firms said on Monday.

The planned transaction, which remains subject to regulatory and other approvals, is expected to be completed by the second quarter of 2022, the firms said.

Telenor and Axiata will each own 33.1 percent of the merged firm Celcom Digi Bhd, which will remain listed in Kuala Lumpur, in line with a preliminary...