Ooredoo Group and CK Hutchison Agree US$6 Billion Merger of their Indonesian Businesses to Create a New World-Class Digital Telco for Indonesia·
Landmark telecoms transaction in Asia with a total transaction value of approximately US$6 billion ·
Doha, Qatar, and Hong Kong SAR, 16 September 2021: Ooredoo Q.P.S.C. (“Ooredoo”) – Ticker: ORDS and CK Hutchison Holdings Limited (“CK Hutchison”) – Ticker: HK0001 (together the “Parties”) today announced the signing of definitive transaction agreements for the proposed merger of their respective telecommunications 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. 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 US$3 billion.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.Indosat Ooredoo and H3I own highly complementary infrastructure and the combination of these assets will also enable the merged company to benefit from cost and CAPEX synergies and provide accretive returns to all stakeholders. Annual run rate pre-tax synergies of approximately US$300-400mm are expected to be realized over 3-5 years. In addition, Indosat Ooredoo Hutchison will be able to leverage the experience and expertise of Ooredoo Group and CK Hutchison in networks, technologies, products and services, and benefit from their multinational operations spanning major markets in Europe, the Middle East, North Africa, and Asia Pacific. The merged company will also benefit from their combined strength and economies of scale in functions such as procurement. Following the merger, the Indonesian mobile market is expected to retain a healthy level of competition, attractive to long-term investment across the industry. 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. Concurrent with the merger, CK Hutchison will acquire a 50% shareholding in Ooredoo Asia by exchanging its 21.8% shareholdings in Indosat Ooredoo Hutchison for a 33.3% stake in Ooredoo Asia, and will acquire an additional 16.7% stake from Ooredoo Group for a cash consideration of US$387 million. Following the above transactions, the Parties will each own 50.0% of Ooredoo Asia, to be renamed Ooredoo Hutchison Asia, which will retain a controlling 65.6% ownership stake in the merged company. Upon closing of the transactions, Indosat Ooredoo Hutchison will be jointly controlled by Ooredoo Group and CK Hutchison. It will remain listed on the Indonesian Stock Exchange, with the Government of Indonesia retaining a 9.6% shareholding, PT Tiga Telekomunikasi Indonesia holding a 10.8% shareholding, and other public shareholders holding approximately 14.0%. Subject to necessary Indosat Ooredoo shareholder approvals, the Parties have agreed to nominate Vikram Sinha as CEO and Nicky Lee as CFO of Indosat Ooredoo Hutchison.