Malaysia's Axiata Explores Unit Merger With Indonesian Conglomerate Sinar Mas

By Ying Xian Wong

Malaysian telco giant Axiata and Indonesian conglomerate Sinar Mas are considering merging their telecom operations in Indonesia in a deal that could create a combined entity with a market capitalization of about $3.6 billion.

The two companies have signed a non-binding memorandum of understanding to discuss the deal, which is in the early stages of negotiation, Axiata said in a statement late Wednesday. There is no certainty that the discussions will lead to a merger, it said.

The proposed deal aims to consolidate XL Axiata and Smartfren to create a strong telecommunications service provider in Indonesia, the Malaysian company said.

Axiata said the combined entity would have the ability and scale to meet the growing demands of consumers, businesses, and the Indonesian public sector.

The deal would create shareholder value via synergies from the two businesses' combined operations, Axiata said.

XL Axiata has a market cap of about $2.07 billion, while that of Smartfren sits at around $1.49 billion, according to figures from data provider FactSet.

Write to Ying Xian Wong at yingxian.wong@wsj.com

(END) Dow Jones Newswires

May 15, 2024 21:34 ET (01:34 GMT)

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