20241211_EXCL_Laporan Informasi dan Fakta Material_31818187_lamp1.pdf

service coverage, product offering and quality of network experience. Synergies derived from merger will
improve shareholder value and will be partly reinvested in future growth opportunities.”


“Axiata has demonstrated significant expertise in executing successful mergers and unlocking value for
shareholders, and we are excited to bring this expertise to XLSmart, combining two solid complementary
businesses to create a strong telecommunications company uniquely positioned to meet the evolving
needs of customers across all key segments. We want to thank all our stakeholders, including our
customers, partners, employees and the Indonesian Government, for participating in this milestone and
supporting Indonesia’s digital future.”


Key Details of the Merger
    •   XL Axiata will serve as the surviving entity, with Smartfren and SmartTel dissolving upon merger
        completion to become part of XLSmart.
    •   Axiata Group Berhad (“Axiata”) and Sinar Mas will become joint controlling shareholders, each
        holding a 34.8% stake in XLSmart, with equal influence over its strategic direction and decisions.
    •   At completion, shareholding equalisation will result in Axiata receiving up to US$475 million. At
        transaction closing, Axiata will receive US$400 million, along with an additional US$75 million at
        the end of the first year subject to the satisfaction of certain conditions.
    •   XLSmart will leverage the networks, expertise, and resources of its shareholders to accelerate
        Indonesia’s digital transformation.


Franky Oesman Widjaja, Chairman of Sinar Mas Telecommunications and Technology, commented: “The
merger is a key part of our strategic effort to deliver significant added value to all stakeholders through
excellent services, digital connectivity, and innovation, including supporting the Indonesian Government’s
efforts in driving digital transformation. This aligns with the philosophy of unity for a greater purpose; as
the saying goes, ‘If you want to go fast, you go alone; if we want to go far, we go together.’ At Sinar Mas,
we often say, ‘Together, we go far, fast, and beyond.’ This brings added value to customers and employees,
while supporting the Indonesian Government’s efforts to encourage digitalization.”


“We deeply appreciate the support of the Government, the dedication of all employees, partners, and
suppliers, and, of course, the trust of investors, which have made this merger possible. XLSmart now has
the opportunity to further contribute to serving the public and support the development of Indonesia's
digital economy.”

Strategic Case for the Merger


Driving Indonesia’s Digital Future
XLSmart leverages the combined strengths of XL Axiata, Smartfren, and SmartTel to deliver enhanced
connectivity to individual, corporate, and public sector customers. By reinvesting in critical areas such as
5G expansion, network upgrades, and product innovation, XLSmart aims to drive technological
advancements and improve customer experiences. Additionally, the merger is set to realize significant cost
synergies, with an estimated annual run-rate pre-tax synergies of US$300 to $400 million post integration
completion, through strategic network integration and resource optimization. This collaboration positions
XLSmart as a transformative force in the telecommunications industry, paving the way for sustainable
growth and innovation.


Scale and Financial Strength
With a combined mobile subscriber base of approximately 94.5 million1 and a market share of 27%1,
XLSmart will generate pro forma revenues of IDR 45.4 trillion1 (US$2.8 billion) and EBITDA of over IDR 22.4
trillion2 (US$1.4 billion). This solid financial foundation positions the company to innovate, grow, and
reward investors.


Dian Siswarini, President Director & CEO of XL Axiata, added: “By combining our resources, expertise,
and market positions, we will enhance our competitive edge, drive innovation, and unlock new growth
opportunities to build a better future together. This merger not only represents a commitment to
strengthening Indonesia’s digital economy but also highlights our dedication to bridging the digital divide,
expanding access to reliable telecommunications, and fostering a digitally inclusive society. With a shared
vision and collective effort, we are poised to deliver value to shareholders, support the nation’s
technological aspirations, and set new benchmarks in the telecommunications industry.”


Benefits for Stakeholders
The merger supports Indonesia’s vision for a digitally inclusive future by accelerating the rollout of 5G, AI,
cloud-based solutions, cyber resilience, improved network quality, and fostering sustainable competition.
This strategic consolidation will align with Government goals to ensure efficient spectrum allocation and
create a healthier market structure that benefits the entire nation.


Employees across all merging entities will gain access to diverse roles and exciting new opportunities for
professional growth. By fostering collaboration and leveraging best practices, the merged company will
prioritize their career development while ensuring compliance with labor laws and creating a supportive
environment.

For customers, the merger will deliver a significantly enhanced experience. Subscribers will benefit from
improved connectivity, faster internet speeds, and broader service coverage. The combined entity’s
expanded product portfolio will cater to both individual consumers and businesses, offering innovative
solutions designed to support MSMEs and enterprises. Customers can also expect more competitive
pricing and access to advanced digital services that reflect the combined resources and expertise of
XLSmart.


Merza Fachys, President Director of Smartfren, added: “This merger is a carefully considered strategic
move to create significant value for all our stakeholders, reflecting our concerted commitment to
delivering superior services, enhancing digital connectivity, and driving innovation in the industry. Bringing
these businesses together will build on our joint, long-term commitment to Indonesia, giving us the
strength and scale to contribute to the country’s digital ambitions meaningfully. There is a clear
opportunity for all of us to play a bigger role in this important journey for our country; we believe that by
creating XLSmart, we can build on our joint, long-term commitment to customers and communities across
Indonesia. We would also like to express our sincere gratitude to the Government of Indonesia. Together,
we firmly believe we can make amazing strides in advancing Indonesia's digital economy.”


Next Steps
The merger plan has been approved by the Boards of XL Axiata, Smartfren, and SmartTel but remains
subject to regulatory and shareholder approvals, as well as customary closing conditions. Assuming all
approvals and conditions are met, completion is expected in the first half of 2025.


As the integration progresses, all merger participants are committed to ensuring a seamless transition for
employees, customers, and partners while providing regular updates to minimize disruptions.


CIMB and J.P. Morgan are acting as financial advisors to certain entities under Sinar Mas. Deutsche Bank
and Maybank are acting as financial advisors to Axiata. Citibank is acting as financial advisor to XL Axiata.


All material updates regarding the merger will be communicated through official channels, including
exchange announcements, regulatory disclosures, and respective company websites.


                                                    -End-


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FTI Consulting
Kainoa Blaisdell                                    Justin Teh
+65 6831 7840                                       +65 6506 7685
kainoa.blaisdell@fticonsulting.com                  justin.teh@fticonsulting.com

About XL Axiata

PT XL Axiata Tbk (XL Axiata) is one of the leading telecommunications companies in Indonesia. XL Axiata
focuses on providing converged services to facilitate everyday life and drive Indonesia's digital economy
development. Operating commercially since October 8, 1996, XL Axiata currently offers a wide range of
services for retail and corporate customers, supported by an extensive and high-quality network across
Indonesia. Since 2015, XL Axiata has implemented a nationwide quality 4G LTE network, followed by the
development of its 5G network in the third quarter of 2021. XL Axiata is part of the Axiata Group, along
with CelcomDigi (Malaysia), Dialog (Sri Lanka), Robi (Bangladesh), Smart (Cambodia), Boost, ADA,
edotco, and Link Net (Indonesia).


About Smartfren


PT Smartfren Telecom Tbk (“Smartfren” / IDX: FREN) and its subsidiary, PT Smart Telecom, is the only
cellular telecommunication service provider in Indonesia operating on a full 4G network as part of the
Sinar Mas business. With national network coverage and around 46,000 4G BTSs spread across 288 cities
throughout Indonesia, Smartfren has been appointed as the official telco partner by leading global
smartphone brands. It is also a pioneer in various product innovations, such as Voice-over-LTE (VoLTE)
and Digital SIM (eSIM) services in Indonesia.

Smartfren delivers a flexible data service experience by offering a range of starter cards and data
packages tailored to various user segments, including Smartfren Kuota M and Kuota L, Daily Unlimited,
and Unlimited Nonstop plans. The company is committed to providing consumers with the best internet
communication experience at an affordable price, alongside business solutions, digital services, and
other innovations that contribute to the advancement of a better Indonesia.