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FREN & EXCL Merging for Telecommunication Leadership

  • FREN and EXCL signed an MoU for a potential merger to enhance customer experience and shareholder value.

  • The early-stage merger involves regulatory compliance, due diligence, and ongoing updates.

By Falito Villienuve Tandra, Salma Farah Faiza, and Iman Satyo Adi

17 May 2024 at 16:30 GMT+7


PT Smartfren Telecom Tbk (FREN) and PT XL Axiata Tbk (EXCL) have signed a non-binding memorandum of understanding (MoU), and as a result, PT Smartfren Telecom Tbk (FREN) announced that it is looking into a possible merger. Along with Axiata Group Berhad, the Sinar Mas group's PT Wahana Inti Nusantara, PT Global Nusa Data, and PT Bali Media Telekomunikasi signed the Memorandum of Understanding.


The management of Smartfren reports that the merger is currently in its early review stage and that the combined company will be jointly controlled under governance terms that will be further elaborated upon and discussed. The management of Smartfren emphasized that the goal of this merger is to improve customer experience and, through synergies, create additional value for shareholders and other stakeholders.



Regulations, such as completing the required due diligence, signing a final agreement, and fulfilling all completion requirements, will apply to the proposed transaction. As soon as the evaluation is completed, more announcements will be made.


President Director of XL Axiata, Dian Siswarini (Right) | Source: Emiten


Anticipated synergies from the merger of PT Smartfren Telecom Tbk (FREN) and PT XL Axiata Tbk (EXCL) are expected to generate significant synergies and create additional value for shareholders and other stakeholders. By integrating resources and expertise, the combined entity will be able to enhance operational efficiency and optimize the services provided to customers.


The primary goal of this merger is to improve customer experience by offering more innovative and high-quality services. Furthermore, the synergies realized will strengthen PT Smartfren Telecom Tbk (FREN) and PT XL Axiata Tbk (EXCL) position in the highly competitive telecommunications sector. Leveraging each company’s network and technology, the combined entity will be able to expand coverage and improve service speed and reliability.


The long-term strategic vision of this collaboration is to achieve sustainable growth and become a market leader in the Indonesian telecommunications industry. This plan is still in the early stages of evaluation, including due diligence and the signing of definitive agreements. Further announcements will be made as these stages are completed, ensuring that the entire process complies with applicable regulations.


Smartfren Collaboration | Source : Smartfren


As part of the merger process, both companies must adhere to stringent regulatory requirements and conduct thorough due diligence. This involves a comprehensive review of financial records, legal obligations, and operational capabilities to ensure a seamless integration.



Regulatory bodies will scrutinize the merger to guarantee compliance with competition laws and to protect consumer interests. Smartfren will play a crucial role in this phase, leveraging its experience and resources to assist with meeting all regulatory standards and completing the due diligence process efficiently. The collaboration between the two companies is essential to address any legal and operational challenges that may arise.


Stakeholders can expect ongoing updates as the process advances. Smartfren has committed to transparency and timely communication, ensuring that all relevant information is shared with the public and regulatory authorities. As each milestone in the due diligence and regulatory review is reached, further announcements will be made, providing clarity on the progress and next steps of the merger.


 

Sources:

Bloomberg

CNBC

IDX

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