Doha – Qatar’s Ooredoo Group and CK Hutchison Holdings Limited 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).
This landmark telecoms merger transaction is valued approximately US$6bn, according to a press release issued by Ooredoo Group. 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.
Indosat Ooredoo Hutchison will be the second largest mobile telecoms company in Indonesia, with an estimated annual revenue of approximately US$3bn.
Ooredoo Group currently has a controlling 65 per cent 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 per cent and PT Tiga Telekomunikasi Indonesia amounting to 10.8 per cent of the merged Indosat Ooredoo Hutchison business.
Concurrent with the merger, CK Hutchison will acquire a 50 per cent shareholding in Ooredoo Asia by exchanging its 21.8 per cent shareholdings in Indosat Ooredoo Hutchison for a 33.3 per cent stake in Ooredoo Asia, and will acquire an additional 16.7 per cent stake from Ooredoo Group for a cash consideration of US$387mn.
Following these transactions, both parties will each own 50 per cent of Ooredoo Asia, to be renamed Ooredoo Hutchison Asia, which will retain a controlling 65.6 per cent ownership stake in the merged company.
Upon closing of the transactions, Indosat Ooredoo Hutchison will be jointly controlled by Ooredoo Group and CK Hutchison and will remain listed on the Indonesian Stock Exchange.