Indonesian telecoms giant PT XL Axiata has acquired a two thirds majority stake in internet and cable TV operator PT Link Net for IDR8,720 billion (€544 million).
PT XL Axiata, the country’s number two mobile player, will acquire a 66.03% stake in the operator. Under the terms of the purchase agreement, Axiata Investments (Indonesia) Sdn Bhd, an indirect wholly-owned subsidiary of Axiata, and XL Axiata will acquire 46.03% and 20.00% respectively from the combined equity interest in Link Net held by Asia Lind Dewa and First Media.
Axiat Investments will then be obliged to undertake a mandatory tender offer to acquire the remaining 33.97% of shares pursuant to regulatory requirements in Indonesia.
The acquisition is expected to be completed in the third quarter of this year, subject to regulatory and other approvals.
Link Net has a subscriber base of about 860,000 within a footprint of 2.8 million homes across 23 cities.
Broadband penetration in Indonesia is about 13.4%, and the country is seen as having strong growth potential for fixed-line providers.
According to XL Axiata, citing figures from Analysis Mason, household penetration is expected to grow to 27.5% by 2026.
The group, which is strong in the enterprise segment, expects to deliver synergies through the combination of wireless services, the sharing of backbone infrastructure and transmission networks.
“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,” said Axiata’s president and group CEO, Dato’ Izzaddin Idris.
“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 recognise 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.”
XL Axiata’s president director and CEO, Dian Siswarini said: “As digital demand accelerates, XL Axiata is gearing up to realise 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.”