review1st.com – Axiata Group Berhad (“Axiata”) and PT XL Axiata Tbk (“XL Axiata”) today completed the joint acquisition of a 66.03% stake in PT Link Net Tbk (“Link Net”) for approximately RM2.63 billion.
Consideration for a purchase of Rp 4,800 per common share in Link Net (“Link Net Shares”) or approximately Rp. 8.72 trillion (equivalent to approximately RM2.63 billion3) for Link Net2’s combined total shares of 66.03%.
This translates to approximately Rs 13.21 trillion (equivalent to approximately RM3 3.99 billion) for a 100.00% stake in Link Net2.
Following completion of the acquisition, Axiata Investments (Indonesia) Sdn Bhd (“AII”), an indirectly owned subsidiary of Axiata, and XL Axiata own 46.03% and 20.00% of the combined total shares of Link Net2, respectively. owned by Asia Link Dewa Pte. Limited. and PT First Media Tbk.
Axiata’s total ownership of Link Net shares through AII and XL Axiata after the completion of this acquisition is 58.33%.
AII will now be required to make a compulsory public offering to purchase the remaining 33.97% of Link’s net shares in accordance with current regulations in Indonesia (“MTO Plan”).
Details on the MTO plan will be announced in due course. The MTO plan is expected to be completed in the third quarter of 2022.
With this acquisition, Link Net and XL Axiata will be well positioned to take advantage of synergies through a combined joint position in the provision of wireless communication services and other communication services, sharing backbone and transmission networks, and an extensive relationship between two clients in Indonesia.
Combined with XL Axiata’s corporate services, including cellular connections, Link Net will be better equipped to tap into the growing corporate market in Indonesia.
According to independent market research, Indonesia is one of the most attractive cable broadband service markets in the world, with a very small domestic market penetration rate of around 13.4%.
The average use of data services per connection on fixed broadband networks in Indonesia has grown with a consolidated annual growth rate (“CAGR”) that increased by 44.4% from 2016 to 2020 and is expected to continue to increase in 27.9% from 2020 to 2026.
Indonesia is also one of the fastest growing cable-based broadband service markets in the world with fixed lines poised to expand at a CAGR of around 14.4%.
Additionally, Indonesian household penetration is expected to rise to 27.5% by 2026, driven by a growing market, increased data usage, and strong disposable income growth.
Link Net’s network coverage continues to expand to major cities in Indonesia, including Jakarta and surrounding areas, Sumatra, West Java, Central Java, East Java and Bali.
In addition to a network spanning approximately 2.9 million households, the company also has a portfolio serving approximately 2,400 clients spanning governments, financial services, and large multinational corporations and digital businesses.
The company began business operations in the year 2000 and has demonstrated a strong operating and financial track record over the years.
For the fiscal year ended December 31, 2021, on a year-on-year basis, Link Net posted an increase in revenue of 10.3% to around Rs 4.5 trillion or the equivalent of RM 1.3 billion).
The Executive Directors of the Joint Action Group, Axiata Dr. Hans Wijayasuriya and Vivek Sood said: “The completion of the Link Net acquisition marks an important milestone in Axiata’s regional operations.
“Being Link Net the Axiata family, it will strengthen our position as a regional Digital Champion in providing converged telecommunications services, in line with our spirit of ‘Moving Forward in Asia’.
Link Net is one of the leading providers of high-speed cable TV and cable broadband services in Indonesia, reaching 2.9 million households in 23 cities, serving approximately 855,000 broadband Internet service subscribers broadband and approximately 837,000 cable television.
Link Net’s experienced and accomplished team will accelerate the company’s growth opportunities in both existing and underserved areas.
We shared an exciting proposal with the Link Net team to increase the momentum of our participation in advancing Indonesia’s fast-growing digital economy.”
XL Axiata President Director and CEO, Dian Siswarini said: “We are very excited about the potential and possibilities that arise from this acquisition. Since our initial announcement, we have identified several areas of synergy that are open from this collaboration and could be realized together with Link Net, leveraging our collective strengths in cellular connectivity, fixed broadband and content.
“This will support the achievement of our vision of becoming a leading convergence operator by providing seamlessly integrated solutions to our increasingly digitally savvy customers.”
President, Director and CEO of Link Net, Marlo Budiman said, “Together with our new partners, we look forward to providing residential and corporate customers with a converged proposition of cellular and fixed-line broadband services.
“The penetration rate of high-speed broadband in Indonesia is still underexplored and the ability to provide a broader range of comprehensive products and services will contribute to future market growth and deliver results for all of our stakeholders.
“Synergy opportunities exist for the two companies, from cooperation in the use of backbone networks, network transmission and strategic alignment to increase revenue and profitability.
“These opportunities are also enhanced by Link Net’s extensive relationships with business partners and customers. Personally, together with the management team, I warmly welcome the new shareholders.
“We strongly believe that this partnership will contribute to outstanding results for our clients and continued growth in future value for our shareholders.”