Axiata Group, XL Axiata to acquire 66% stake in Link Net for $610m

Axiata Group Berhad and XL Axiata will jointly acquire a stake of 66.03% Link Net Tbk, an Indonesian broadband and cable TV services provider, from Asia Link Dewa and First Media Tbk for IDR8.72 trillion ($610 million).

The deal values 100% of Link Net at around IDR13.21 trillion ($920 million).

While Axiata Group is a Malaysian telecommunications conglomerate, XL Axiata is an Indonesia-based mobile telecommunications services operator, which is owned by the former.

As per the terms of the conditional share purchase agreement (SPA) signed by the parties, Axiata Investments (Indonesia), an indirect fully-owned subsidiary of Axiata Group will acquire a stake of 46.03% in Link Net. XL Axiata will acquire 20%, on the other hand, in the Indonesian broadband and cable TV services provider.

Subsequently, Axiata Investments (Indonesia) will be obligated to carry out a mandatory tender offer to buy out the remaining stake of 33.97% in Link Net as per the regulatory requirements in Indonesia.

Link Net, which started its commercial operations in 2000, is said to reach 2.8 million homes across 23 Indonesian cities. It is claimed to have a subscriber base of nearly 860,000.

Marlo Budiman — President, Director, and CEO of Link Net said: “The successful completion of the transaction will provide significant opportunities for Link Net together with our new partners, to provide converged fixed line broadband and mobile service propositions to both our residential and enterprise clients.

“Indonesia’s high speed broadband market remains deeply underpenetrated and the ability to provide a wider and more comprehensive product offering is expected to contribute to future growth and benefit all our stakeholders.”

Axiata Group, XL Axiata to acquire 66% stake in Indonesian broadband and cable TV services provider Link Net

Axiata Group, XL Axiata to acquire 66% stake in Indonesian broadband and cable TV services provider Link Net. Photo courtesy of Hans Braxmeier from Pixabay.

Axiata Group stated that the deal is likely to generate considerable synergies for Link Net and XL Axiata via their combined positions in wireless communication services, sharing of backbone and transmission networks and deep relationships with customers in Indonesia. Along with the enterprise offerings of XL Axiata, which include mobile connections, Link Net will be well placed to cash in on the growing enterprise market, said the Malaysian telecom conglomerate.

Dato’ Izzaddin Idris — Axiata Group President and Group CEO said: “In addition to doubling down on a high-growth segment in one of our key markets, our investment into Link Net is aligned with Axiata’s aspiration to support digital inclusion as Asian societies and businesses accelerate digitally.”

“Both XL Axiata and Link Net are well placed to generate synergies through their combined positions in wireless communication services, extensive relationships with customers in Indonesia and strong strategic alignment. We also recognize the wealth of management and operational experience within Link Net’s employee base and welcome them to be a part of this growth journey.

“By leveraging the strengths of our telco business from XL Axiata and Link Net’s broadband and connectivity solutions, we look forward to delivering compelling customer-focused converged solutions for the home and enterprise segments as Indonesia continues to advance its digital economy.”

The acquisition of the majority stake and the subsequent mandatory tender offer, which are subject to regulatory and shareholder approvals, and other customary conditions, are likely to be wrapped up in Q3 2022.

Dian Siswarini — XL Axiata President, Director and CEO said: “As digital demand accelerates, XL Axiata is gearing up to realize our vision to become the leading converged operator in Indonesia.

“The synergies that will be unlocked through collaborations with Link Net make this an attractive proposition given the opportunity to combine strengths in mobile connectivity, fixed broadband and content.

“Moving forward, our customers who are increasingly embracing digital lifestyles to live, learn, work and play, can look forward to seamlessly converged solutions that will equip them for competitiveness and growth in this new normal.”

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