DUBAI: Two top telecommunications companies in Indonesia have reached an agreement to merge their businesses — pegged to be one of the largest telecom deals in Asia valued at $6 billion.
Ooredoro and CK Hutchison will merge their telecoms businesses to form “a larger, commercially stronger, and more competitive world-class telecoms and internet company,” the pair said in a statement.
The new company will be called Indosat Ooredoo Hutchison.
Under the deal, assets and infrastructure of both companies will be shared, as well as their expertise in international markets such as Europe, and the Middle East and North Africa region.
“This merger is a landmark deal for Asia and for Ooredoo Group. It furthers our strategy to drive more value from our portfolio and accelerate digitalization across our global footprint,” Faisal bin Thani Al-Thani, chairman of the Ooredoo Group, said.
The deal will give CK Hutchison newly issued shares in Indosat Ooredoo, amounting to 21.8 percent, and PT Tiga Telekomunikasi Indonesia, working out to 10.8 percent.
It will also acquire 50 percent shares in Ooredoo Asia, and an additional 16.7 percent stake from Ooredoo Group for a cash consideration of $387 million.
Both companies will each own 50 percent of Ooredoo Asia, set to be renamed Ooredoo Hutchison Asia, which will retain a controlling 65.6 percent ownership stake in the merged company.
The new company will remain listed on the Indonesian Stock Exchange, with the Indonesian government retaining 9.6 percent in shares.