XL Axiata completes Axis acquisition
Jakarta XL Axiata Axis Capital group
Indonesian mobile operator XL Axiata, a subsidiary of Malaysia’s Axiata Group, has completed the acquisition of smaller rival Axis Telekom. Earlier this month the transaction received approval from Indonesian anti-monopoly authority Komisi Pengawas Persaingan Usaha (KPPU) – the last regulatory hurdle needed for the deal to proceed – with both companies’ shareholders plus other Indonesian regulators already having approved the takeover. In December 2013 the Ministry of Communications and Information Technology (MoCI) agreed to the transaction going ahead on the condition that the enlarged entity hand back several blocks of 2100MHz mobile frequency spectrum. Axiata said that through its acquisition and merger with Axis, XL will provide better and more comprehensive services to a greater number of customers throughout Indonesia. ‘With the conclusion of this acquisition, XL has now become a majority shareholder in Axis,’ commented XL’s president director Hasnul Suhaimi, adding: ‘We thank and offer the utmost appreciation for the support of several parties, particularly regulators, shareholders as well as XL and Axis consumers, all of which made the acquisition possible. Consolidation in the telecommunications sector has become a necessity to ensure a healthy and sustainable industry.’
In September 2013 XL Axiata signed a conditional sale and purchase agreement with Saudi Telecom Company (STC) and STC’s subsidiary Teleglobal Investments to acquire the latter’s 95% stake in Axis for USD865 million. XL Axiata has announced that USD500 million of the acquisition price will come from its Malaysian parent, while the remainder will be sourced via bank loans. The merged Axiata/Axis will have a combined base of more than 77 million subscribers, equivalent to around 24% of the total mobile market, but still well behind market leader Telkomsel which claims over 40% of all users.