(Bloomberg) -- Malaysian wireless carrier Axiata Group Bhd. and Indonesian conglomerate PT Sinar Mas Group are nearing an agreement to merge their telecommunications operations in Southeast Asia’s largest economy, people familiar with the matter said.
The owners of PT XL Axiata and PT Smartfren Telecom are finalizing details of a transaction that could be announced as soon as this week, the people said, asking not to be identified because the matter is private. The companies have been discussing the structure of a deal that may involve a mix of cash and shares and that would create an entity with about 100 million customers, Bloomberg News reported in April.
XL Axiata’s shares slipped as much as 1.3% Tuesday, the most since Nov. 22, but later pared the loss. They have advanced 15% since the start of this year, giving the company a market value of $1.9 billion. Axiata Group rose 1.3% Tuesday. Smartfren’s shares were little changed, leaving them with a loss of 46% in 2024. Smartfren’s market value is $811 million.
Talks are ongoing and could still face delays, the people said. If it pushes through, a deal would cap more than three years of discussions.
A representative for the companies declined to comment.
The companies said in May they had signed a non-binding memorandum of understanding. Both Axiata and Sinar Mas were seeking to remain as controlling shareholders of the merged entity, they added.
An Axiata-Sinar Mas deal would add to the list of Indonesian telecoms mergers over the past few years. CK Hutchison Holdings Ltd. and Qatar’s Ooredoo QPSC completed a merger of their local telecoms businesses in 2022 in a $6 billion transaction as they sought to fend off competition.
(Updates share price moves in third paragraph.)
©2024 Bloomberg L.P.