Axiata, Sinar Mas seal merger plans before PM Anwar and President Prabowo

Axiata Group Berhad and Sinar Mas have solidified their merger plans with the signing of two memorandums of understanding (MoUs), witnessed by Malaysian Prime Minister Dato' Seri Anwar Ibrahim (pictured, right) and Indonesian President Prabowo Subianto (pictured, left) at the Petronas Twin Towers in Kuala Lumpur.

One of the agreements highlights the commitment of both companies to their ambitious merger plans, according to a press release. In December 2024, Axiata and Sinar Mas announced their intention to merge XL Axiata, Smartfren Telecom, and Smart Telcom to form XLSmart Telecom Sejahtera (XLSmart) in Indonesia.

With an estimated combined pre-synergy company value of over IDR 104 trillion (around US$6.5 billion), the merger aims to enhance customer service quality, improve digital connectivity, and drive a healthier, more competitive telecommunications market in Indonesia.

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The other MoU sets the stage for further discussions around specific projects that aim to drive growth in Malaysia, Indonesia, and the broader Southeast Asian region by leveraging the respective telecom ecosystems of Axiata and Sinar Mas.

Axiata Group CEO Vivek Sood highlighted the importance of this partnership in driving the next wave of digital transformation in Southeast Asia. "By deepening our partnership with Sinar Mas, we aim to harness the transformative power of 5G, business solutions, and digital infrastructure to support economic growth and bridge the digital divide in Malaysia, Indonesia, and beyond," he said.

Both companies will work closely to analyse market trends, evaluate competition, and identify unfulfilled needs within priority markets. Their goal is to capitalise on their respective strengths to unlock new opportunities, creating a thriving digital ecosystem.

Franky Oesman Widjaja (pictured, second from left), chairman of Sinar Mas Telecommunications and Technology, said the MoUs mark a new chapter in the shared vision of Axiata and Sinar Mas. "We believe their combined strengths will create long-term value for stakeholders and contribute to the regional economy by bolstering connectivity, driving innovation, and empowering businesses and communities across the region," Widjaja said.

Both firms will support XLSmart through a "hold and grow" strategy, an "asset-right/light" model, and network-sharing opportunities to maximise value and efficiency, the release said.

The merger is subject to government approval and regulatory conditions, with completion expected in the first half of 2025.

Axiata is a leading telecom and digital firm with operations across ASEAN and South Asia. It holds controlling stakes in major regional operators, including XL and Link Net in Indonesia, Dialog in Sri Lanka, Robi in Bangladesh, and Smart in Cambodia, while CelcomDigi in Malaysia is a key associate company.

Meanwhile, Sinar Mas is a diversified conglomerate spanning pulp and paper, agribusiness, real estate, financial services, energy, and telecoms. It plays a key role in Indonesia's economic landscape.

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