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Jakarta, September 26, 2013 - PT XL Axiata Tbk. (XL) has agreed to acquire PT Axis Telekom Indonesia (AXIS), by entering into a conditional sale and purchase agreement (CSPA) with Saudi Telecom Company (STC) and Teleglobal Investments B.V. (Teleglobal), a subsidiary of STC. This action will drive industry consolidation, supporting a healthier telecommunications industry going forward and, more importantly, enable XL to provide improved network quality to customers.
This acquisition will provide significant benefits to customers and all stakeholders. Customers will experience enhanced service quality across a broader, higher capacity and deeper network.
XL is paying as consideration a nominal equity value and only part of AXIS’ overall liabilities and indebtedness.
Key highlights of the CSPA are the following:
Teleglobal will sell (or procure the sale of) a 95% equity stake in AXIS to XL
AXIS is valued at 100% enterprise value of USD 865 million, on a cash free and debt free basis.
The purchase consideration will be utilized towards payment of a nominal value for AXIS equity and redemption of AXIS' indebtedness.
The completion of the transaction is subject to
All applicable regulatory approvals
XL shareholders’ approval at an Extraordinary General Meeting of Shareholders
Spectrum retention
The acquisition will address XL’s current challenges and provide additional resources for XL whilst also benefitting other stakeholders.
Key Rationale for XL’s acquisition of AXIS:
Over 65 million customers will immediately benefit from the superior quality of service and wider coverage
Consolidates the industry further and paves the way for more prudent, growth focused expansion with a more efficient capex profile
Supports the government’s national broadband objective
Addresses XL’s current challenges - Provides additional spectrum capacity to XL, subject to regulatory approvals, leading to:
Significantly enhanced quality of service and network experience on both 2G and 3G
Enhanced asset utilization, particularly on XL's towers and network equipment, with tangible reduction in capex and opex spends
Further reinforces XL’s leadership position, with sizeable business operations and scale
Larger subscriber base and on-net community
Stronger and more effective data focus and traction amongst the youth segment
Complementary businesses with multiple areas of revenue and cost synergies
President Director of XL, Hasnul Suhaimi, said, “XL is committed to our customers who will significantly benefit from this transaction. With the acquisition of AXIS (AXIS launched its services in April 2008 and is available in many major islands of Indonesia), XL will reinforce its leadership in the Indonesian telecommunications industry with strong traction in mobile data services. I believe all industry participants are in agreement that the industry must consolidate. This will be driven by companies like XL who have the will and ability to accelerate the development of high quality communication services in Indonesia. Furthermore, XL is committed to investing in the next generation of mobile technologies and to bring back the broader industry ecosystem to healthier economics. We will fully comply with the prevailing regulations, and will consult and work with the regulators throughout the approval process.”
As Indonesia’s GDP continues to grow at an impressive 6% p.a., the role of telecommunications has shifted more strategically for many Indonesians. Today, telecommunications services are not only important in providing for connectivity, but also for increasing productivity, especially in mobile data services which experienced traffic growth of approximately 100 percent last year. The acquisition will enable XL to become a stronger data-focused operator well positioned to capture the large and fast growing, mobile data opportunity.
Both companies have integration plans and teams in place, which, post regulatory approvals, will enable XL to drive integration and synergies with XL’s strong execution track record and cost leadership DNA.
Merrill Lynch (Singapore) Pte. Ltd. (Bank of America Merrill Lynch) is acting as exclusive financial advisor to XL in respect of this transaction.
About XL
PT XL Axiata Tbk. is one of the major cellular providers in Indonesia. PT XL Axiata Tbk. is 66.5% owned by Axiata Group Berhad through Axiata Investments (Indonesia) Sdn Bhd and public 33.5%, and is part of Axiata
