Axiata Group Berhad and Sinar Mas today jointly announce the signing of two Letters of Intent to explore and advance a series of strategic collaborations at a ceremony graced by Malaysian Prime Minister Dato’ Seri Anwar Ibrahim and His Excellency Prabowo Subianto, the President of Indonesia, at the Petronas Twin Towers in Kuala Lumpur.
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The first LOI lays a robust foundation for progressing detailed discussions outlining specific projects and initiatives that drive further collaboration around potential synergies in Malaysia, Indonesia, and Southeast Asia. Leveraging their respective telecommunications ecosystems, Axiata and Sinar Mas aim to explore opportunities to unlock value for stakeholders in several high-growth areas, including advanced 5G solutions, enterprise services, digital infrastructure, and fintech innovations. Ultimately, these potential advancements stand to support digital transformation initiatives across the region.
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Vivek Sood, Group Chief Executive Officer of Axiata Group, commented: “These Letters of Intent with Sinar Mas represent a pivotal step in advancing regional collaboration to shape Southeast Asia’s next wave of digital transformation and advance services in high-growth areas. By deepening and reaffirming our ongoing partnership with Sinar Mas, we aim to harness the transformative potential of 5G, enterprise solutions, and digital infrastructure to drive sustainable economic growth and bridge the digital divide across Malaysia, Indonesia, and beyond.”
“We deeply appreciate the steadfast support of the governments of Malaysia and Indonesia, whose forward-looking policies on connectivity and digital inclusion have set a strong foundation for such partnerships. By aligning our shared ambitions with national and regional digital economy agendas, we are laying the groundwork for a vibrant and inclusive digital ecosystem that delivers transformative services, empowers businesses, and enriches lives.”
Under the scope of the first LOI, Axiata and Sinar Mas will jointly conduct detailed market analyses, evaluate competitive landscapes, and identify unmet demand across priority markets. Both companies will assess core competencies within their respective ecosystems to prioritise opportunities and define optimal operating models to effectively capture market potential. The Parties also intend to facilitate strategic partnerships to incubate new businesses and solutions, ensuring alignment with national and regional digital economy agendas.
Franky Oesman Widjaja, Chairman of Sinar Mas Telecommunications and Technology, commented: “These two Letters of Intent signed today with Axiata represent an exciting chapter in our shared mission to accelerate Malaysia and Indonesia’s digital transformation. We are confident in our ability to unlock synergies, deliver long-term value for stakeholders, and make a meaningful impact on the region’s digital economy by enhancing connectivity, fostering innovation, and empowering businesses and communities.”
“Sinar Mas is keen to collaborate with Axiata to explore new innovative opportunities while supporting Malaysia and Indonesia’s vision of a thriving and inclusive digital economy. Together, we aim to set a benchmark for regional collaboration, creating a more interconnected and prosperous future.”
The second LOI signed today reaffirms Axiata’s and Sinar Mas’s various commitments set out in the Definitive Agreements jointly announced on 11 December 2024 to progress the proposed merger of PT XL Axiata Tbk, PT Smartfren Telecom Tbk, and PT Smart Telcom to form PT XLSmart Telecom Sejahtera Tbk (“XLSmart”) in Indonesia1. The LOI confirms their shared intent in this landmark transaction, which stands to give XLSmart a combined pre-synergy enterprise value of over IDR104 trillion (~US$6.5 billion)2, symbolising a strong collective vision to foster innovation, improve customer service quality, and enhance digital connectivity in Indonesia while contributing to a healthier and more competitive market.
The LOI reiterates the Parties’ desire to, amongst others, work together in good faith to meet the agreed conditions outlined in the Definitive Agreements, ensuring the smooth progression of the transaction. It also underscores their intent to enhance and unlock potential synergies arising from bringing their respective businesses together. Additionally, the Parties aim to support XLSmart in exploring the optimal strategic approaches for integration, including the “hold and grow” strategy, adopting an “asset-right/light” model, and pursuing potential network-sharing opportunities to maximise value and operational efficiency.
The merger remains subject to regulatory and shareholder approvals, as well as customary closing conditions. Assuming all approvals and conditions are met, completion is expected in the first half of 2025. All material updates regarding the merger will be communicated through official channels, including exchange announcements, regulatory disclosures, and respective company websites.
About Axiata
In pursuit of its vision to be The Next Generation Digital Champion, Axiata is a diversified telecommunications and digital conglomerate operating Digital Telcos, Digital Businesses and Infrastructure businesses across a footprint spanning ASEAN and South Asia.
The Group has controlling stakes in market-leading mobile and fixed operators in the region 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. Axiata’s regional digital business verticals comprise ‘Boost’ a fintech company, and ‘ADA’, a digital analytics and AI company. ‘EDOTCO’ is among the top 10 independent TowerCos globally, operating in nine countries to deliver telecommunications infrastructure services.
As a committed and long-term investor, the Group actively supports and drives young talent development; community outreach; as well as climate change initiatives. Axiata’s broader goal of Advancing Asia aims to piece together the best in the region in terms of innovation, connectivity and talent to drive digital inclusion and sustainable progress across our markets.
About Sinar Mas
Since its founding by Eka Tjipta Widjaja in 1938, Sinar Mas has grown and developed into sectors including Pulp & Paper, Agribusiness & Food, Financial Services, Real Estate Development, Telecommunications & Technology, Energy & Infrastructure, and Healthcare.
The Sinar Mas group of businesses, sharing a common history and corporate values, are committed to upholding the highest standards in business, environmental stewardship, and social responsibility to achieve sustainable and inclusive growth, playing important business and social roles in Indonesia and the countries we operate in.
