The proposed merger would create PT XLSmart Telecom Sejahtera Tbk (XLSmart), an operator projected to have a mobile subscriber base of 94.5 million users, capturing a market share of 27%.
Smartfren parent Sinar Mas and Axiata Group Berhad will become point controlling shareholders, each holding a 34.8% stake in XLSmart.
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The newly formed XLSmart will leverage the networks and expertise of both brands to accelerate Indonesia’s digital transformation.
XLSmart will look to invest in expanding 5G networks and upgrading existing network systems to “drive technological advancements and improve customer experiences”.
Franky Oesman Widjaja, chair of Sinar Mas Telecommunications and Technology, said: “The merger is a key part of our strategic effort to deliver significant added value to all stakeholders through excellent services, digital connectivity, and innovation, including supporting the Indonesian Government’s efforts in driving digital transformation.
“XLSmart now has the opportunity to further contribute to serving the public and support the development of Indonesia's digital economy.”
The proposed merger is expected in the first half of 2025 subject to regulatory conditions.
Upon completion, shareholding equalisation would result in Axiata receiving around $475 million, with a further $75 million at the end of the first year of closing subject to certain conditions being met.
The deal has been in the works for some time, with reports back in April suggesting XL Axiata and Smartfren were looking to merge in the wake of Indosat Ooredoo and CK Hutchinson’s tie-up.
“By combining our resources, expertise, and market positions, we will enhance our competitive edge, drive innovation, and unlock new growth opportunities to build a better future together,” said Dian Siswarini, president director and CEO of XL Axiata.
“This merger not only represents a commitment to strengthening Indonesia’s digital economy but also highlights our dedication to bridging the digital divide, expanding access to reliable telecommunications, and fostering a digitally inclusive society.”
