Axiata is headquartered in Kuala Lumpur.
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Smartfren Telecom, controlled by Sinar Mas, the investment company of billionaire Widjaja family, and Malaysia’s Axiata Group have agreed to merge their telecoms businesses in Indonesia in a deal worth 104 trillion rupees ($6.5 billion).
Under the agreement, Smartfren Telecom and its subsidiary Smart Telcom will be merged into XL Axiata, creating a combined entity called XLSmart Telecom Sejahtera, the two companies said in regulatory filings with the Indonesian Stock Exchange on Wednesday.
Axiata and Sinar Mas will become joint controlling shareholders, each holding a 34.8% stake in XLSmart. As part of the transaction, Axiata will receive a cash payment of up to US$475 million from Sinar Mas Group.
“XLSmart now has the opportunity to further contribute to serving the public and supporting the development of Indonesia’s digital economy,” Franky Oesman Widjaja, chairman of Sinarcom Telecom and Technology, said in a statement.
The companies’ boards of directors have approved the planned merger, which remains subject to regulatory and shareholder approvals and customary closing conditions. The transaction is expected to close in the first half of 2025, subject to all necessary approvals and conditions being met.
Indonesia is Southeast Asia’s largest economy and has four mobile phone operators, the two smallest of which are XL Axiata and Smartfren. Merging the two companies would create a larger entity with a total of about 94 million users, giving it a stronger competitive position against larger rivals such as Indosat Ooredoo Hutchison, which has 98 million users, and Ooredoo Hutchison, which has State-owned Telkomsel has 159 million subscribers.
The newly merged company will also have stronger financials to support its growth, with revenue expected to reach 45.4 trillion rupees and EBITDA of over 22.4 trillion rupees.
Vivek Sood, CEO of Axiata Group, said in the same report: “We firmly believe that industry consolidation paves the way for connectivity between Indonesia and ASEAN, bridging the digital divide and promoting community and business A prosperous and inclusive future that thrives.
The Widjaja family has a net worth of US$10.8 billion, ranking fourth on the Forbes Indonesian 50 Rich List released in December 2023. Agribusiness and other fields.
