In a southeast Asian M&A that was rumored to be in the cards as far back as May, Malaysian-based XL Axiata has announced an agreement to buy Axis Telecom. Axiata's Indonesia subsidiary will be buying a 95% stake in the Indonesian service provider from Saudi Telecom Company and Teleglobal Investments.
The deal will give XL Axiata additional spectrum for its mobile operations with LTE in the wings, and of course greater scale generally in Indonesia. According to Telecom Asia, the market in the region is overcrowded and this sort of consolidation is overdue. The merger will create an operator with 65M customers and a marketshare of 22% in Indonesia.
The pricetag will be $865M, of which $100M will be cash and the balance will be the assumption of debt. And that remaining 5% will of course be held by an Indonesian shareholder, satisfying regulations over foreign ownership of telecommunications companies.
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