- Both parties intend to continue to hold the position of MergeCo’s combined controlling owners.
- Major value to occur from combined level, competencies, finances and expertise
Axiata Group Bhd, PT Wahana Inti Nusantara ( WIN), PT Global Nusantara ( GND), and PT Bali Media Telekomunikasi ( collectively referred to as the Parties and each a Party ), announced on May 15 that they have signed a non-binding MOU to explore the possibility of a merger between XL Axiata and Smartfren in order to form a new entity ( MergeCo ). With both Axiata and Sinar Mas wanting to continue to be shared controlling shareholders of MergeCo, the proposed deal is still in its early stages of examination.
The Events make it clear that there is no guarantee that the parties ‘ ongoing discussions will lead to the signing of any legally binding documents or the closing of the proposed deal. The main tasks that will be carried out during the experimental period governed by the non-binding MOU will be the valuation of the merger logic and value development to shareholders, due diligence, the preparation of a mutual business plan, and the signing of an agreement on key terms. As needed, any significant developments in this MOU may become made public. The related transaction will be subject to, among other things, regulatory and business approvals if a binding agreement is to be reached in the future.
The proposed merger of XL Axiata and Smartfren is anticipated to bring up both Sinar Mas ‘ local level and industry expertise in order to build a stronger communications service provider in Indonesia. Both leaders are expected to have an equal amount of influence over MergeCo’s strategic and operational decisions.
Axiata believes that MergeCo will have the proper agility, ability, and size to match increasing expectations and demand from consumers, businesses, and the Indian public sector. MergeCo is anticipated to provide a superior customer experience in the telecom industry and add value to the company, including through synergies from the combined functions of XL Axiata and Smartfren.
Axiata emphasized that it is committed to remaining a leading participant in Indonesia’s online and tech environment, supporting the government’s online future. Indonesia is a significant business that supports its proper activities. XL Axiata is Axiata’s largest advantage and from a collection aspect, Indonesia is the highest worth creator, where it runs five major businesses- XL Axiata, Link Net, EDOTCO, Boost and ADA.