Knock! XL Axiata Officially Merges With Smartfren Worth IDR 104 Trillion

Company XL Axiata (photo: XL Axiata)

JAKARTA - PT XL Axiata Tbk (XL Axiata), PT Smartfren Telecom Tbk (Smartfren), and PT Smart Telcom (SmartTel) officially merged with a combined value of pre-synergy reaching more than 6.5 billion US dollars or around Rp. 104 trillion.

This merger will form a new telecommunications entity called PT XLSmart Telecom Sejahtera Tbk (XLSmart), to encourage innovation, improve service quality, and expand digital connectivity throughout Indonesia.

"We firmly believe that this industrial consolidation opens the way for a more connected Indonesia and ASEAN, as well as helping to unravel the problem of digital inequality in creating an inclusive future for the entire community and business so that it can develop," said Vivek Sood, Group Chief Executive Officer, Axiata Group.

Through this merger, Viviek added, it will allow XL Axiata to meet the unique infrastructure needs of Indonesia as an archipelagic country by providing a platform that will increase service coverage and quality, a wide selection of attractive products, and improve network quality.

"Axiata has the expertise to execute successful mergers and provide value for shareholders, and we are excited to bring this expertise to XLSmart, combining two complementary businesses to create telecommunications companies," he concluded.

With this merger, XL Axiata will be the main entity that survives the merger, while Smartfren and SmartTel will join a new entity called XLSmart.

Thus, Axiata Group Berhad (Axiata) and Sinar Mas will become joint controlling shareholders, each with 34.8% ownership and equal influence in the company's strategic decisions.

This transaction will provide Axiata with a financial gain of up to 475 million US dollars (Rp7.5 trillion), consisting of 400 million US dollars (Rp6.32 trillion) received when the transaction is complete and an additional 75 million US dollars (Rp1.18 trillion) at the end of the first year, depending on the fulfillment of certain conditions.

The presence of XLSmart is also expected to accelerate digital transformation in Indonesia by utilizing networks, expertise, and resources from shareholders.