Jakarta, Indonesia — PT XL Axiata Tbk, PT Smartfren Telecom Tbk, and PT Smart Telcom have entered into a definitive agreement to merge, creating a new telecommunications entity, PT XLSmart Telecom Sejahtera Tbk (“XLSmart”), with a combined pre-synergy enterprise value of approximately IDR 104 trillion (~US$6.5 billion). The merger aims to foster innovation, enhance service quality, and improve digital connectivity across Indonesia, making XLSmart a significant player in the market.
XL Axiata will remain the surviving entity in the merger, while Smartfren and SmartTel will dissolve into the newly formed XLSmart. The two companies’ joint controlling shareholders, Axiata Group Berhad and Sinar Mas, will each hold a 34.8% stake in XLSmart, with equal influence over its strategic direction. As part of the deal, Axiata will receive US$475 million, with US$400 million paid at closing and an additional US$75 million at the end of the first year, contingent on meeting specific conditions.
The merger combines the complementary strengths of the three companies, creating a telecommunications powerhouse capable of meeting the growing demands of Indonesia’s digital economy. XLSmart will invest in digital infrastructure, with a focus on expanding 5G networks, network upgrades, and product innovation, while realizing significant cost synergies estimated at US$300 million to $400 million annually after integration.
The merger’s financial strength is considerable, with a combined mobile subscriber base of 94.5 million and a market share of 27%. XLSmart’s projected pro forma revenues will total IDR 45.4 trillion (~US$2.8 billion), with an EBITDA of over IDR 22.4 trillion (~US$1.4 billion), providing a strong foundation for innovation and growth.
XLSmart’s formation supports Indonesia’s push for digital inclusion, aiming to accelerate the adoption of 5G, AI, cloud-based solutions, and enhance cyber resilience. The merger is expected to improve network quality, service offerings, and pricing, while creating a more competitive market that benefits consumers and businesses alike. Customers will see enhanced connectivity, faster internet speeds, and access to innovative services designed to support both individual consumers and enterprises.
The merger is still subject to regulatory and shareholder approvals, with completion expected in the first half of 2025. As the integration process unfolds, the companies involved are committed to ensuring a smooth transition, keeping stakeholders informed, and minimizing disruptions during the merger process.
