After securing various regulatory approvals, Indonesian mobile operator XL Axiata has completed its acquisition of smaller rival Axis, creating the country’s second-largest player.
In late September last year XL, which is owned by Malaysian…
After securing various regulatory approvals, Indonesian mobile operator XL Axiata has completed its acquisition of smaller rival Axis, creating the country’s second-largest player.
In late September last year XL, which is owned by Malaysian giant Axiata, agreed to buy Saudi Telecom (STC)-held Axis for a symbolic cash consideration of US$100 plus the assumption of US$865m in debt.
Merrill Lynch acted as exclusive financial adviser to XL on the deal.
The transaction marks one of the first consolidation moves in Indonesia’s saturated market, which is now home to nine mobile operators, and enables XL Axiata to secure some precious spectrum.
However, one of the conditions for regulatory approval included the pledge by both companies to return 10 MHz of spectrum in the 2,100 MHz band.
Commenting on the deal, XL president director Hasnul Suhaimi said: “Consolidation in the telecommunications sector has become a necessity to ensure a healthy and sustainable industry.”
To finance the transaction, the operator secured a US$500m loan from its parent. The remaining US$365m was provided by financial institutions UOB Bank, Bank of Tokyo-Mitsubishi UFJ and DBS Bank.
