Three leading Indonesian telecommunications companies − PT XL Axiata (EXCL), PT Smartfren Telecom (FREN), and PT Smart Telcom − have merged to create a new entity called XLSmart, valued at over Rp104 trillion (US$6.5 billion), with XL Axiata to serve as the surviving entity in this significant consolidation.
XLSmart aims to enhance service coverage, network quality, and infrastructure development tailored to the unique needs of Indonesia’s archipelagic geography.
Vivek Sood, Group CEO of Axiata Group, hailed the merger as a strategic milestone in addressing the digital divide across Indonesia.
“Axiata brings extensive experience in successful mergers, and we are excited to leverage this expertise to create greater value for XLSmart shareholders,” Sood said on Wednesday, August 11, 2024.
The merged entity designates Axiata Group Berhad and Sinar Mas Group as controlling shareholders, each holding a 34.8 percent stake.
To ensure balanced ownership, Axiata will receive a total of US$475 million, comprising US$400 million upon closing and an additional US$75 million by the end of the first year.
Digital transformation and connectivity
Franky Oesman Widjaja, Chairman of Sinar Mas Telecommunication and Technology, emphasized that the merger aligns with the shared goal of accelerating Indonesia’s digital transformation.
“This strategic move underscores our commitment to delivering superior services, fostering digital connectivity, and supporting the government’s initiatives to drive a robust digital economy,” Franky said.
The merger is also poised to enhance regional connectivity in ASEAN, fostering a more inclusive digital ecosystem.
With streamlined resources and networks, XLSmart is expected to deliver improved services, expand market reach, and empower businesses in the digital era.
