Jakarta. Malaysian telecommunications giant Axiata and Indonesian conglomerate Sinar Mas recently inked a letter of intent on a merger deal -- worth Rp 104 trillion or up to $6.5 billion -- that would culminate in the establishment of XLSmart in Indonesia.

Last month, Sinar Mas and Axiata announced that they would merge their Indonesia-based cellular telecom operators: XL Axiata, Smartfren Telecom, and its subsidiary Smart Telecom. The new entity will go with the XLSmart name.

The signed letter of intent got unveiled on the sidelines of President Prabowo Subianto’s meeting with Malaysian Prime Minister Anwar Ibrahim in Kuala Lumpur. A letter of intent -- commonly referred to in abbreviated form LoI -- is a non-binding document that reflects an entity’s intention to enter into a formal agreement.

“The LoI reiterates the parties’ desire to, amongst others, work together in good faith to meet the agreed conditions outlined in the definitive agreements, ensuring the smooth progression of the transaction,” Axiata Group’s press release reads.

The deal remains subject to regulatory and shareholder approvals, as well as customary closing conditions. Axiata Group said that the merger would close within the first half of 2025 should they secure all approvals and conditions, marking no change from the previously announced deadline.

Axiata and Sinarmas will each hold a 34.8 percent stake in XLSmart. The merged company will also leverage the resources, expertise, and networks of its shareholders. XLSmart is expected to boast 94.5 million subscribers, and a 27 percent market share. It is set to record a pro forma revenue worth Rp 45.4 trillion, and over Rp 22.4 trillion in EBITDA (earnings before interest, taxes, depreciation, and amortization).