Ooredoo and CK Hutchison Holdings Limited (CK Hutchison) have signed the 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). The merged company will be named PT Indosat Ooredoo Hutchison Tbk (Indosat Ooredoo Hutchison).
Ooredoo Group has a controlling 65% 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 up to 21.8% and PT Tiga Telekomunikasi Indonesia up to 10.8% of the merged Indosat Ooredoo Hutchison business.
CK Hutchison will acquire a 50% shareholding in Ooredoo Asia and will acquire an additional 16.7% stake from Ooredoo Group for a cash consideration of US$387 million. Following the above transactions, each company will own 50% of Ooredoo Asia, to be renamed Ooredoo Hutchison Asia, which will retain a controlling 65.6% ownership stake in the merged company.
Indosat Ooredoo Hutchison will be jointly controlled by Ooredoo Group and CK Hutchison. The Government of Indonesia will retain a 9.6% shareholding, PT Tiga Telekomunikasi Indonesia holding a 10.8% shareholding, and other public shareholders holding app. 14%. The proposed combination is expected to be completed by the end of 2021.
JP Morgan is acting as exclusive financial advisor to Ooredoo Group. Goldman Sachs & Co. and HSBC are acting as joint financial advisors to CK Hutchison. Barclays is acting as financial advisor to Indosat Ooredoo.