Indonesia gives green light to Ooredoo-Indosat merger valued at $6 billion

Indonesia on December 4 approved a merger of the local telecom units of Qatar’s Ooredoo and Hong Kong’s CK Hutchison supposed to be worth about $6 billion. A 2025 deadline has been set for the merged entity to complete the merger and provide coherent services, a statement by the country’s communication ministry said.

The Indonesian authorities had already given the merger a principal approval in November.

CK Hutchison Holdings and Ooredoo announced the deal in September last year and said they would create a merged entity called Indosat Ooredoo Hutchison which would become the country’s second biggest telecom company after state-backed PT Telekomunikasi Selular, or Telkomsel, with an estimated annual revenue of approximately $3 billion.

“Contributing to Indonesia’s digital transformation”

According to the merger agreement, Indosat must increase its tower sites by at least 11,400 by 2025 and expand its cellular services to cover a minimum of 7,660 more villages or districts across the vast archipelago by the same year, the ministry said.

The company is also required to improve its service quality by increasing data download and upload speeds by at least 12.5 per cent by 2025, it added.

“We hope the national telecom industry will be (…) more productive and efficient to support the national digital transformation,” Indonesia’s telecommunication minister Johnny Gerard Plate said, noting that the merger would further strengthen the capital structure of Indosat.

Vikram Sinha, who has held the position of chief operating officer of Indosat Ooredoo since 2019, has been appointed CEO of the merged company.

Significant synergies expected

Ooredoo Group and CK Hutchison added that the merger would realise “significant operational synergies that will deliver cost efficiencies and facilitate deeper innovation and network enhancements, including the rollout of 5G in Indonesia.”

Indosat Ooredoo Hutchison will be controlled by Ooredoo Group and CK Hutchison with a joint 65.6% shareholding. The new company will remain listed on the Indonesian Stock Exchange under the ticker ORDS, with Indonesia’s government retaining a 9.6 per cent shareholding, while CK Hutchison’s local mobile phone unit Tri Indonesia will hold a 10.8 per cent stake and public shareholders 14 per cent.



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Indonesia on December 4 approved a merger of the local telecom units of Qatar’s Ooredoo and Hong Kong’s CK Hutchison supposed to be worth about $6 billion. A 2025 deadline has been set for the merged entity to complete the merger and provide coherent services, a statement by the country’s communication ministry said. The Indonesian authorities had already given the merger a principal approval in November. CK Hutchison Holdings and Ooredoo announced the deal in September last year and said they would create a merged entity called Indosat Ooredoo Hutchison which would become the country’s second biggest telecom company after...

Indonesia on December 4 approved a merger of the local telecom units of Qatar’s Ooredoo and Hong Kong’s CK Hutchison supposed to be worth about $6 billion. A 2025 deadline has been set for the merged entity to complete the merger and provide coherent services, a statement by the country’s communication ministry said.

The Indonesian authorities had already given the merger a principal approval in November.

CK Hutchison Holdings and Ooredoo announced the deal in September last year and said they would create a merged entity called Indosat Ooredoo Hutchison which would become the country’s second biggest telecom company after state-backed PT Telekomunikasi Selular, or Telkomsel, with an estimated annual revenue of approximately $3 billion.

“Contributing to Indonesia’s digital transformation”

According to the merger agreement, Indosat must increase its tower sites by at least 11,400 by 2025 and expand its cellular services to cover a minimum of 7,660 more villages or districts across the vast archipelago by the same year, the ministry said.

The company is also required to improve its service quality by increasing data download and upload speeds by at least 12.5 per cent by 2025, it added.

“We hope the national telecom industry will be (…) more productive and efficient to support the national digital transformation,” Indonesia’s telecommunication minister Johnny Gerard Plate said, noting that the merger would further strengthen the capital structure of Indosat.

Vikram Sinha, who has held the position of chief operating officer of Indosat Ooredoo since 2019, has been appointed CEO of the merged company.

Significant synergies expected

Ooredoo Group and CK Hutchison added that the merger would realise “significant operational synergies that will deliver cost efficiencies and facilitate deeper innovation and network enhancements, including the rollout of 5G in Indonesia.”

Indosat Ooredoo Hutchison will be controlled by Ooredoo Group and CK Hutchison with a joint 65.6% shareholding. The new company will remain listed on the Indonesian Stock Exchange under the ticker ORDS, with Indonesia’s government retaining a 9.6 per cent shareholding, while CK Hutchison’s local mobile phone unit Tri Indonesia will hold a 10.8 per cent stake and public shareholders 14 per cent.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

 

 

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