Ooredoo Group and CK Hutchison Holdings Limited has announced the signing of a US$6 billion agreement for the proposed merger of their telco businesses in Indonesia, PT Indosat Tbk (Indosat Ooredoo) and PT Hutchison 3 Indonesia (H3I). The merged company will be named PT Indosat Ooredoo Hutchison Tbk (indosat Ooredoo Hutchison).
The merger of Indosat Ooredoo and H3I will bring together two highly complementary businesses to create a larger, commercially stronger and more competitive world-class digital telecoms and internet company, well placed to deliver more value for all shareholders, customers and for Indonesia.
According to Ooredoo Group, the new digital telco will be well-positioned to accelerate Indonesia’s economic growth and transformation into a digital society. It will further be the second largest mobile telecoms company in the country, with an estimated annual revenue of approximately US$3 billion.
The combined company is said to have the scale, financial strength, and expertise to compete more effectively. Combining the highly complementary assets and products of Indosat Ooredoo and H3I will drive innovation and network improvements that will enable the delivery of outstanding digital services, as well as a broader product offering, to customers across Indonesia.
Following the merger, the Indonesian mobile market is expected to retain a healthy level of competition, attractive to long-term investment across the industry, it added.
Ooredoo Group currently has a controlling 65.0% shareholding in Indosat Ooredoo through Ooredoo Asia, a wholly-owned holding company. The merger of Indosat and H3I will result in CK Hutchison receiving newly issued shares in Indosat Ooredoo amounting to 21.8% and PT Tiga Telekomunikasi Indonesia amounting to 10.8% of the merged Indosat Ooredoo Hutchison business.
Upon closing, Indosat Ooredoo Hutchison will be jointly controlled by Ooredoo Group and CK Hutchison.
Ooredoo Managing Director Aziz Aluthman Fakhroo said: "This agreement is a significant step towards our shared vision of creating outstanding value for our customers and shareholders by bringing together two of Indonesia’s leading telecoms brands to create a stronger number two player in Indonesia, backed by two highly committed partners in Ooredoo Group and CK Hutchison."
"With this agreement in place, we can now turn our attention to closing the transaction and then working closely with CK Hutchison to leverage the combined expertise of our respective global telecoms groups to build a world-class digital telco for Indonesia," he stated.
This merged company will deliver significant value and benefits for all stakeholders including Indosat Ooredoo and Ooredoo Group shareholders, for customers, employees and Indonesia.
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