Asian Tech Press (SEP 17) -- CK Hutchison Holdings Limited, the flagship company of Hong Kong tycoon Li Ka-shing's family, announced Thursday evening (Sept. 16) that it has entered into several agreements with Qatar's Ooredoo Group to merge their Indonesian telecommunications subsidiaries, H31 and Indosat, in a deal valued at about $6 billion.
H31 is a subsidiary of CK Hutchison, which owns 66.976%, while Indosat is a subsidiary of Ooredoo. The combination will make the company the second-largest telecommunications company in Indonesia, with annual revenues of US$3 billion.
Under the agreement, H31 will be merged into Indosat by statutory merger under Indonesian law, and its shareholders will receive newly issued shares of the merged company. Indosat will continue as the surviving legal entity (i.e., the merged company), and the new company will be named PT Indosat Ooredoo Hutchison Tbk upon completion of the merger. It will maintain its listing on the Indonesia Stock Exchange.
CK Hutchison will acquire 50% of the shares of the new consolidated company through the merger and share swap by investing 21.84% of the shares of the new consolidated company and US$387 million in cash in a holding company so that each of CK Hutchison and Ooredoo will directly own 50% of the shares of the holding company. Both parties hold 65.6% of the listed company Indosat Hutchison through this holding company.
The Indonesian government will hold a 9.6% stake in the listed company. The transaction was approved by regulatory authorities and is expected to be completed by the end of this year.
Both parties said the partnership will better combine their strengths. The new company will have a larger and more efficient cost structure, accelerating investment in network, service quality and product and service innovation. The new company will leverage the talents of both companies to support the Indonesian government's digitalization process.
H3I is a leading mobile communications provider in Indonesia. Operating commercially in Indonesia since 2007, H3I has evolved into a digital lifestyle provider offering data, digital, voice, SMS, international roaming and other mobile telecommunication services to its customers.
Indosat is an integrated telecommunications company focused on providing mobile, connectivity, Internet, and virtual private network and fixed-line services to retail consumers and corporate customers ranging from small and medium-sized enterprises to large corporations and the Indonesian government. The company also provides cloud, security and data center services and other enterprise solutions to Indonesian and international enterprises and the Indonesian government.
