PT XL Axiata Tbk (“XL Axiata”), PT Smartfren Telecom Tbk (“Smartfren”), and PT Smart Telcom (“SmartTel”) are happy to announce that the parties have entered into a definitive agreement for a proposed merger with a combined pre-synergy enterprise value of IDR104 trillion (~US$6.5 billion). This merger will establish PT XLSmart Telecom Sejahtera Tbk (“XLSmart”), a new telecommunications powerhouse combining the strengths of Indonesia’s trusted telecommunications operators to drive innovation, improve service quality, and enhance digital connectivity nationwide.
A Stronger Local Player
This merger brings together complementary capabilities to create a robust entity serving a significant portion of Indonesia’s telecommunications market. XLSmart will have the scale, financial strength, and expertise to drive investments in digital infrastructure, expand service coverage, and foster innovation for customers while contributing to a healthier and more competitive market.
Vivek Sood, Group Chief Executive Officer of Axiata Group, commented: “We firmly believe that industry consolidation paves the way for a more connected Indonesia and ASEAN, bridging the digital divide to foster a thriving and inclusive future where communities and businesses flourish. This merger is an important step in laying the foundation for a robust digital economy. It will allow us to cater to the unique infrastructure demands of the Indonesian archipelago by providing a scalable platform that will enhance
1 All financials as of LTM September 2024; Assumed FX (USD / IDR) of 16,000; Financials presented are pre-synergies.
2 EBITDA values denote revenue less operating expenses plus depreciation/amortization.
service coverage, product offering and quality of network experience. Synergies derived from merger will improve shareholder value and will be partly reinvested in future growth opportunities.”
“Axiata has demonstrated significant expertise in executing successful mergers and unlocking value for shareholders, and we are excited to bring this expertise to XLSmart, combining two solid complementary businesses to create a strong telecommunications company uniquely positioned to meet the evolving needs of customers across all key segments. We want to thank all our stakeholders, including our customers, partners, employees and the Indonesian Government, for participating in this milestone and supporting Indonesia’s digital future.”
Key Details of the Merger
- XL Axiata will serve as the surviving entity, with Smartfren and SmartTel dissolving upon merger completion to become part of XLSmart.
- Axiata Group Berhad (“Axiata”) and Sinar Mas will become joint controlling shareholders, each holding a 34.8% stake in XLSmart, with equal influence over its strategic direction and decisions.
- At completion, shareholding equalisation will result in Axiata receiving up to US$475 million. At transaction closing, Axiata will receive US$400 million, along with an additional US$75 million at the end of the first year subject to the satisfaction of certain conditions.
- XLSmart will leverage the networks, expertise, and resources of its shareholders to accelerate Indonesia’s digital transformation.