DIGIVESTASI - PT XL Axiata Tbk (EXCL), PT Smartfren Telecom Tbk (FREN), and PT Smart Telcom have officially agreed to merge, creating a combined pre-synergy valuation exceeding IDR 104 trillion, equivalent to USD 6.5 billion. The merger gives rise to a new entity named PT XLSmart Telecom Sejahtera Tbk (XLSmart). The new company is expected to drive innovation, enhance service quality, and expand digital access across Indonesia.

Vivek Sood, Chief Executive Officer of Axiata Group, expressed confidence that this merger represents a significant step in improving connectivity in Indonesia and the ASEAN region. The consolidation of the three companies is also seen as a means to bridge the existing digital divide.

Vivek added that the merger is a critical move toward building a strong foundation for the digital economy while addressing Indonesia’s unique infrastructure needs as an archipelagic country. Through this platform, XLSmart aims to broaden its reach and improve the quality of its services.

The synergy created through this merger is anticipated to generate added value for shareholders while enabling the company to seize future growth opportunities.

“Axiata has extensive experience in successfully executing mergers and creating value for shareholders. We are excited to bring this expertise to XLSmart by combining two complementary businesses to create a telecommunications company that can effectively meet the needs of customers across key segments,” Vivek stated in an official release on Wednesday (12/11/2024).

Merger Details and Financial Standing

In the merger process, XL Axiata will serve as the surviving entity, while Smartfren and Smart Telcom will be integrated into XLSmart.

Axiata Group Berhad (Axiata) and Sinar Mas will jointly act as controlling shareholders, each holding a 34.8% stake. Both parties will have equal influence in shaping the company’s direction and strategy.

Upon transaction completion, Axiata will receive an initial payment of USD 400 million, with an additional USD 75 million to be paid by the end of the first year, subject to meeting specific conditions.

With shareholder support, XLSmart will leverage its network, expertise, and resources to accelerate Indonesia’s digital transformation.

Strong Financial Position

XLSmart will begin operations with a solid financial foundation, boasting a combined mobile subscriber base of 94.51 million, securing a 27% market share. The company’s proforma revenue is projected at USD 2.8 billion (approximately IDR 45.4 trillion), with an estimated EBITDA of USD 1.4 billion (around IDR 22.4 trillion).

With this robust financial footing, XLSmart is well-positioned to continue innovating, expanding, and delivering attractive returns to its investors.

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