Axiata and Sinar Mas announced on Tuesday they have signed two Letters of Intent (LOIs) – one to jointly explore digital transformation opportunities in Southeast Asia, and the other confirming the planned merger of Indonesian telcos XL Axiata and Smartfren.
In the first LOI, Malaysia-based Axiata and Indonesia-based Sinar Mas agreed to leverage their respective telecoms ecosystems to explore opportunities in “high-growth areas” such as advanced 5G solutions, enterprise services, digital infrastructure, and fintech innovations.
The two companies will conduct detailed market analyses to prioritise potential markets, and facilitate strategic partnerships to develop new businesses and solutions.
The ultimate goal of the collaboration deal is to support digital transformation initiatives both in their home countries and across the Southeast Asia region, said Axiata Group CEO Vivek Sood.
“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,” he said in a joint statement.
“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,” added Franky Oesman Widjaja, chairman of Sinar Mas Telecommunications and Technology.
Meanwhile, the second LOI reaffirms Axiata’s and Sinar Mas’s various commitments set out in their deal last month to merge XL Axiata and Smartfren Telecom into XLSmart in a deal valued at IDR104 trillion (US$6.5 billion).
Axiata and Sinar Mas also agreed in the LOI to explore the most optimal integration model for the merger, which could include a “hold and grow” strategy, adopting an “asset-right/light” model, and network-sharing. The merger is on track to be completed in the first half of 2025, barring any regulatory issues.
