Ooredoo and CK Hutchison agreed to merge their respective telecommunications businesses in Indonesia to create what is expected to be the second largest mobile operator in the country.
The deal, which is valued at US$6 billion, will combine PT Indosat Tbk (“Indosat Ooredoo”) and PT Hutchison 3 Indonesia (“H3I”). The merged company will be named PT Indosat Ooredoo Hutchison and will have an estimated annual revenue of approximately US$3 billion.
The companies expect the merger to result in annual run rate pre-tax synergies of approximately US$300-400mm over 3-5 years.
Aziz Aluthman Fakhroo, Managing Director of Ooredoo Group, 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.
Canning Fok, Group Co-Managing Director of CK Hutchison Holdings Limited, 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.
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