Thursday 28 October 2021

Ooredoo seals $6bn Indonesia telecom merger agreement

DOHA, September 16, 2021

Leading Qatari telecom services operator Ooredoo and CK Hutchison Holdings have announced the signing of a $6 billion deal for the proposed merger of their Indonesian telco businesses - PT Indosat and PT Hutchison 3 Indonesia (H3I) - in bid to create a new world-class digital telco for the South East Asian country.
The merged company will be named PT 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 telecom and internet company, well placed to deliver more value for all shareholders, customers and for Indonesia.
Indosat Ooredoo Hutchison will be well positioned to accelerate Indonesia’s economic growth and transformation into a digital society. It will be the second largest mobile telecoms company in the country, with an estimated annual revenue of approximately $3 billion.
According to Ooredoo, the combined company will 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. It will remain listed on Indonesian Stock Exchange, with the government retaining a 9.6% shareholding, PT Tiga Telekomunikasi Indonesia holding a 10.8% shareholding, and other public shareholders holding approximately 14%. 
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. 
Through economies of scale and the realization of synergies between these highly complementary businesses, the merged company will be well placed to deliver a higher return on investment for all shareholders and build on the outstanding growth momentum already achieved by Indosat Ooredoo.
Importantly, the merger will create a company with the strength and scale to accelerate Indonesia’s digital transformation and improve network performance and customer experience across the country.
Group Co-Managing Director Canning Fok said: "This is a great opportunity to create a stronger and more innovative telco player in Indonesia and will be an accretive transaction for shareholders and other stakeholders alike. Indosat Ooredoo Hutchison will have a critical mass that will enable it to drive network expansion and improvements that will support the Government’s digital agenda and benefit customers and Indonesia as a whole."
Chairman Sheikh Faisal Bin Thani Al Thani said this merger is a landmark deal for Asia and for Ooredoo Group. "It furthers our strategy to drive more value from our portfolio and accelerate digitalization across our global footprint. I look forward to a long and successful partnership with CK Hutchison and to working together to build Indosat Ooredoo Hutchison into a digital champion for Indonesia," he added.
JP Morgan is acting as exclusive financial advisor to Ooredoo Group, while Goldman Sachs & Co. and HSBC are acting as joint financial advisors to CK Hutchison. Barclays is the financial advisor to Indosat Ooredoo.-TradeArabia News Service


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