Indonesian mobile market shrinks as XL Axiata combines with Smartfren

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The deal comes with a price tag of $6.5 billion

Having been in discussions since May this year, Indonesia’s third- and fourth-largest telcos, XL Axiata and Smartfren, have finally agreed to merge their operations.

The deal, valued at around $6.5 billion, will see both parties take a 34.8% stake in the merged entity, with the remaining 30.4% stake being traded publicly.

Axiata will receive roughly $400 million as part of the deal.

The new company will be called PT XLSmart Telecom Sejahtera Tbk, or XL Smart for short, and will command a market share of roughly 27%, based on figures from September.

“We are excited to bring our expertise to XLSmart, combining two complementary and solid businesses to form a strong telecommunications operator uniquely positioned to meet the evolving needs of customers across all key segments. XLSmart will be a powerful platform to deliver enhanced connectivity, foster digital inclusion, and bridge the digital divide for communities across the country. XLSmart’s priorities will be on ensuring a stable market environment, maximising merger synergies and driving profitable growth,” said Vivek Sood, Group Chief Executive Officer and Managing Director of Axiata.

“We are confident that XLSmart will be well-positioned to thrive in Indonesia’s dynamic digital economy. Ultimately, we aim to unlock lasting value and benefits for all our stakeholders, including shareholders, customers, employees, and Indonesia as a whole,” he added.

Assuming typical regulatory clearances, the deal is expected to close in the first half of next year.

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