Axiata, Sinar Mas Get Shareholders Nod On XLSMART Merger

KUALA LUMPUR, March 26 (Bernama) -- Axiata Group Bhd and Sinar Mas announced that shareholders of PT XL Axiata Tbk, PT Smartfren Telecom Tbk, and PT Smart Telcom (SmartTel) have formally approved the merger of the three companies into XLSMART.

The merger marks a significant milestone in Indonesia’s telecommunications sector.

In a joint statement, the parties said the approval was secured following extraordinary general meetings of XL Axiata, Smartfren, and SmartTel shareholders held on Tuesday. 

This follows prior in-principle regulatory approvals from Indonesia’s Ministry of Communication and Digital Affairs and the approval of the Indonesia Stock Exchange (IDX) and the Financial Services Authority (OJK), further solidifying institutional support for the strategic consolidation. 

The approval signifies the confidence of shareholders in the combined potential of XL Axiata and Smartfren, reinforcing their commitment to driving a more integrated, efficient, and innovative telecommunications industry, they said. 

"With this shareholder endorsement, XLSMART will continue the important roles played by XL Axiata and Smartfren in Indonesia’s development via the critical telecommunications industry. 

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"Combining XL Axiata’s extensive infrastructure and reach with Smartfren’s digital innovation, XLSMART is better able to serve consumers and businesses in the era of digitalisation," they said. 

Following the completion of the merger, Axiata Group and Sinar Mas will become joint controlling shareholders, each holding a 34.8 per cent stake in XLSMART, with equal influence over its strategic direction and decisions.

"XLSMART is well-positioned to lead the next phase of growth in Indonesia’s telecommunications sector, with a subscriber base exceeding 94.3 million and annual projected revenue of IDR 45.8 trillion (IDR1 million=RM266.9).

"The landmark merger is also set to realise significant cost synergies, with an estimated annual run-rate pre-tax synergies of US$300 million-US$400 million (US$1=RM4.43) post integration completion," they said. 

Meanwhile, the parties also announced that Rajeev Sethi has been appointed as XLSMART’s president director and chief executive officer, to be supported by a robust executive team that includes nine directors and nine commissioners, ensuring a well-balanced representation from both XL Axiata and Smartfren. 

"Rajeev has extensive and successful experience in transforming telecommunications companies in emerging markets that will help XLSMART to realise its synergy values," they said. 

-- BERNAMA