XL Axiata and Smart Fren finalise $6.5B merger, forming XLSmart Telecom

Indonesia’s telecom operators XL Axiata and Smart Fren have finally agreed to merge their operations, creating a powerhouse in the nation's mobile market. The merged entity, named XLSmart Telecom, is valued at approximately $6.5 billion, aligning with the broader market trend towards consolidation following similar moves by Indosat and Ooredoo Hutchison. The collaboration will give XLSmart an impressive 94.5 million customer base, equating to 27% of the market, and expected revenues of IDR45.41 trillion. Each company will hold 34.8% of the entity, with Sinar Mas committing to pay up to $475 million to equalize its shares. Axiata predicts annual synergies of $300-$400 million, enhancing competitiveness and financial stability. The merger is deemed critical for advancing Indonesia’s digital infrastructure and economy. Meanwhile, Axiata’s shares saw a suspension of trading in Kuala Lumpur yet increased 4.4% over the last month. The deal is part of Axiata's broader successful strategy of executing mergers across Asia, with the transaction expected to be completed by the first half of 2025. Additionally, private equity firm I Squared is conducting due diligence for a potential acquisition of Hong Kong’s HKBN, highlighting active telecom M&A across Asia.