Ooredoo Group and CK Hutchison combined their respective units in Indonesia after receiving regulatory clearance for the transaction, a move the two claimed created a world-class digital telecoms player.
The $6 billion tie-up brings together operators Indosat Ooredoo and Hutchison 3 Indonesia (H3I). The resulting business trades as PT Indosat Ooredoo Hutchison and becomes the second largest provider in the market by connections behind Telkomsel.
In a joint statement, the two parent companies announced the formation of the new entity as of today (4 January) after receiving all required regulatory and shareholder approvals.
The merger was announced to shareholders in September 2021, having reportedly been in the pipeline since December 2020.
PT Indosat Ooredoo Hutchison is expected to have an annual revenue of around $3 billion, the pair noted, with the merger of the two businesses designed to create operational synergies. This, they claim, will reduce costs and facilitate service and network upgrades including the rollout of 5G.
GSMA Intelligence connection figures for Q4 places Indosat Ooredoo as the second largest provider in the market with 61.3 million. H3I was the fourth largest with 46.8 million. Combining the two still puts them well short of Telkomsel’s 173.3 million.
As previously announced, the CEO of the newly combined business is former Indosat Ooredoo COO Vikram Sinha with CK Hutchison’s Nicky Lee appointed CFO.
Ooredoo Group managing director Aziz Aluthman Fakhroo said the deal created: “a stronger number two player in Indonesia, backed by two highly committed partners.”
CK Hutchison Holdings co-MD Canning Fok added: “Indosat Ooredoo Hutchison is now a stronger, world-class digital telecoms and internet company with critical mass.”
The publicly listed entity will be jointly controlled by the two parent companies with a combined stake of 65.6 per cent. Among other notable stakeholders is the Indonesian Government, which holds a 9.6 per cent share.