Axiata to Acquire 66% Stake in Indonesia’s Link Net

Malaysian multinational telecommunications conglomerate Axiata Group Berhad and its Indonesian subsidiary PT XL Axiata Tbk have agreed to jointly take a 66.03 percent stake in PT Link Net Tbk for $606.19 million, the Malaysia telecoms group said on Thursday.  

Under the terms of a conditional share purchase agreement with Asia Link Dewa Pte Ltd and PT First Media Tbk, Axiata Investments (Indonesia) Sdn Bhd, an indirect wholly-owned subsidiary of Axiata, and XL Axiata will buy 46.03 percent and 20 percent stakes, respectively.  

Then, Axiata Investments will be obliged to accept a mandatory offer to acquire the remaining shares in Link Net. At the same time, the deal values 100 percent equity interest in Link Net at about IDR13.21 trillion.  

This acquisition and offer will be funded via a combination of internally generated funds and bank borrowings. They are expected to be completed in the third quarter of this year and are subject to regulatory and shareholder approvals.  

“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,” Axiata President and Group CEO, Izzaddin Idris said.  

According to independent market research, Indonesia is one of the most attractive fixed broadband markets globally, significantly underpenetrated at 13.4 percent in household penetration.   

It is also one of the fastest-growing broadband markets globally, with fixed connections prepared for substantial expansion at a complex annual growth rate of approximately 14.4 percent.  

Additionally, household penetration is expected to increase to 27.5 percent by 2026, driven by a growing addressable market, escalating data use, and the robust growth in Indonesia’s disposable income per capita.  

Link Net said the acquisition was subject to several conditions in the agreement and regulations.  

“The successful completion of the transaction will provide significant opportunities for Link Net together with our new partners, to provide converged fixed-line broadband and mobile service propositions to both our residential and enterprise clients,” President Director and CEO of Link Net Marlo Budiman said in the statement.