KUALA LUMPUR: Axiata Group Bhd's has signed a conditional share purchase agreement to jointly acquire a 66.03 per cent stake in PT Link Net Tbk from Asia Link Dewa Pte Ltd (ALD) and PT First Media Tbk (FM) for RM2.55 billion.
This translates to a value of about RM3.86 billion for 100 per cent equity interest in Link Net.
In a statement, the telecommunication company said under the terms of the agreement, Axiata Investments (Indonesia) Sdn Bhd (AII), an indirect wholly-owned subsidiary of Axiata, and XL Axiata shall acquire 46.03 per cent and 20 per cent, respectively, from the combined equity interest of 66.03 per cent in Link Net held by ALD and FM.
AII will then be obligated to undertake a mandatory tender offer (MTO) to acquire the remaining 33.97 per cent Link Net shares pursuant to regulatory requirements in Indonesia.
President and group chief executive officer Datuk Izzaddin Idris said in addition to doubling down on a high-growth segment in one of the company's key markets, Axiata's investment into Link Net is aligned with its aspiration to support digital inclusion as Asian societies and businesses accelerate digitally.
"Both XL Axiata and Link Net are well placed to generate synergies through their combined positions in wireless communication services, extensive relationships with customers in Indonesia and strong strategic alignment.
"We also recognise the wealth of management and operational experience within Link Net's employee base and welcome them to be a part of this growth journey.
"By leveraging the strengths of our telco business from XL Axiata and Link Net's broadband and connectivity solutions, we look forward to delivering compelling customer-focused converged solutions for the home and enterprise segments as Indonesia continues to advance its digital economy," he said.
Axiata said the acquisition and MTO are expected to be completed in the third quarter of 2022 and will be subjected to customary completion conditions, including regulatory and shareholder approvals.
The acquisitions will be funded via a combination of internally generated funds and/or bank borrowings, the proportions of which will be determined at a later date.
Link Net commenced its commercial operations in 2000 and has since grown to be among the leading providers of high-speed broadband and cable TV in Indonesia, reaching 2.8 million homes across 23 cities with a subscriber base of approximately 860,000.
Based on independent market research, Indonesia is one of the most attractive fixed broadband markets globally, significantly underpenetrated at 13.4 per cent in terms of household penetration, Axiata said.
Indonesia's household penetration is expected to increase to 27.5 per cent by 2026, driven by a growing addressable market, escalating data use and the robust growth in Indonesia's disposable income per capita.