Axiata and Sinar Mas are looking into a mobile unit acquisition in Indonesia

[ASEAN NOW Content Team]

 

According to persons familiar with the situation, Malaysia's largest wireless carrier Axiata Group and Indonesian giant Sinar Mas Group are considering options, including merging their telecoms businesses in Indonesia.

According to two persons familiar with the situation, the owners of PT XL Axiata and PT Smartfren Telecom are working with advisers to explore possibilities, which might include agreements about pooling their networks.

 

XL Axiata and Smartfren both saw their stock prices rise.
On Friday (Oct. 8), the shares of XL Axiata surged as much as 4.5 percent, giving the business a market capitalization of nearly 32 trillion rupiah (S$3.05 billion).
Smartfren's stock soared by as much as 8%, putting the company at almost 33 trillion rupiah.

 

The persons indicated that discussions are still underway and that there is no guarantee that a merger will take place.
Representatives for Axiata and Sinar Mas declined to comment.

 

In answer to a query from Bloomberg News, Smartfren Telecom president director Merza Fachys remarked, "Smartfren is willing to consolidate or partner with other industry participants aiming for operational efficiency."
"However," he said, "all parties must receive the same benefits."

Dian Siswarini, XL Axiata's president and director, said the business has always been open to "consolidating with any party" and directed Bloomberg News to shareholders.

 

A strategic partnership between XL Axiata and Smartfren would take place in the midst of consolidation in one of the world's fastest-growing telecommunications markets.
Last month, CK Hutchison Holdings and Qatar's Ooredoo QPSC announced a US$6 billion (S$8.1 billion) merger of their Indonesian telecom operations.
PT Telkom Indonesia, a state-owned company, is still the largest operator in Southeast Asia's most populated country.

According to Bloomberg News, Axiata was approached by CK Hutchison, a Hong Kong corporation funded by entrepreneur Victor Li, about combining its telecoms businesses in Indonesia in 2019.