Axiata Group Berhad (AXIATA) M&A Announcement summary

Deal rationale and strategic fit

• Merger creates a leading Indonesian digital telco with regional experience and local expertise, transforming the market into a three-player structure and supporting sustainable growth.

• Combined entity will have approximately 94.5 million subscribers, ranking #2 overall and #1 in low band spectrum, and will drive digital transformation and innovation.

• Aims to deliver seamless connectivity, invest in 5G, AI, cloud, and cyber resilience, and support Indonesia’s digital economy growth.

• Supported by strong local and regional shareholders, leveraging Axiata's and Sinar Mas's expertise and ecosystem.

• Aligns with a broader strategy to consolidate markets, deliver sustainable value, and advance digital inclusion.

Financial terms and conditions

• Merger ratio set at 72:28, with XL Axiata as the surviving entity; Sinar Mas acquires 13.1% stake from Axiata for $400M at completion and $75M after one year.

• Post-merger, Axiata and Sinar Mas will each hold 34.8% of the new entity, with minorities at 30.4%, and both will have joint control.

• Transaction is value accretive by $200M for Axiata, with the merged company valued at $2.7B pre-equalization and Axiata’s total value at $1.4B post-merger.

• Combined pro forma revenues of IDR45.41 trillion (USD2.8 billion) and EBITDA of IDR22.42 trillion (USD1.4 billion) pre-synergies.

• Proceeds of MYR 2.1B from equalization will primarily be used to pay down group debt.

Synergies and expected cost savings

• Annual run-rate pre-tax synergies of $300M–$400M expected post-integration, mainly from network and procurement efficiencies.

• 20–30% of overlapping network sites to be decommissioned or redeployed, optimizing capital expenditure.

• Vendor consolidation, digitization, and commercial channel optimization to enhance operational efficiency.

• Enhanced digital channel acceleration and cross-selling opportunities.

• Synergies to support reinvestment in 5G, customer experience, and network connectivity.