Ooredoo Group, CK Hutchison agree $6bn Indonesian merger
The Peninsula
Ooredoo Q.P.S.C. (Ooredoo) and CK Hutchison Holdings Limited (CK Hutchison) yesterday 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 $3bn. 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 $300-400mm are expected to be realized over 3-5 years.