TIDM62AO
RNS Number : 0785M
Ooredoo Q.P.S.C.
16 September 2021
16 September 2021
Ooredoo Q.P.S.C.
Ooredoo Group and CK Hutchison Agree US$6 Billion Merger of
their Indonesian Businesses to Create a New World-Class Digital
Telco for Indonesia
-- Landmark telecoms transaction in Asia with a total
transaction value of approximately US$6 billion
-- The transaction will consolidate the merged company as a
stronger second operator in Indonesia with annual revenue of
approximately US$3 billion
-- The merger will be beneficial for all shareholders and
customers and further accelerate Indonesia's digital
transformation
---Doha, Qatar, and Hong Kong SAR, 16 September 2021: Ooredoo
Q.P.S.C. ("Ooredoo") - Ticker: ORDS and CK Hutchison Holdings
Limited ("CK Hutchison") - Ticker: HK0001 (together the "Parties")
today announced the signing of 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").
The merger of Indosat Ooredoo and H3I will bring together two
highly complementary businesses to create a larger, commercially
stronger and more competitive world-class digital telecoms and
internet company, well placed to deliver more value for all
shareholders, customers and for Indonesia.
Indosat Ooredoo Hutchison will be well positioned to accelerate
Indonesia's economic growth and transformation into a digital
society. It will be the second largest mobile telecoms company in
the country, with an estimated annual revenue of approximately US$3
billion.
The combined company will have the scale, financial strength,
and expertise to compete more effectively. Combining the highly
complementary assets and products of Indosat Ooredoo and H3I will
drive innovation and network improvements that will enable the
delivery of outstanding digital services, as well as a broader
product offering, to customers across Indonesia.
Indosat Ooredoo and H3I own highly complementary infrastructure
and the combination of these assets will also enable the merged
company to benefit from cost and CAPEX synergies and provide
accretive returns to all stakeholders . Annual run rate pre-tax
synergies of approximately US$300-400mm are expected to be realized
over 3-5 years.
In addition, Indosat Ooredoo Hutchison will be able to leverage
the experience and expertise of Ooredoo Group and CK Hutchison in
networks, technologies, products and services, and benefit from
their multinational operations spanning major markets in Europe,
the Middle East, North Africa, and Asia Pacific. The merged company
will also benefit from their combined strength and economies of
scale in functions such as procurement.
Following the merger, the Indonesian mobile market is expected
to retain a healthy level of competition, attractive to long-term
investment across the industry.
Ooredoo Group currently has a controlling 65.0% 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 amounting to 21.8%
and PT Tiga Telekomunikasi Indonesia amounting to 10.8% of the
merged Indosat Ooredoo Hutchison business.
Concurrent with the merger, CK Hutchison will acquire a 50%
shareholding in Ooredoo Asia by exchanging its 21.8% shareholdings
in Indosat Ooredoo Hutchison for a 33.3% stake 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, the Parties will each own 50.0% of Ooredoo Asia, to
be renamed Ooredoo Hutchison Asia, which will retain a controlling
65.6% ownership stake in the merged company.
Upon closing of the transactions, Indosat Ooredoo Hutchison will
be jointly controlled by Ooredoo Group and CK Hutchison. It will
remain listed on the Indonesian Stock Exchange, with the Government
of Indonesia retaining a 9.6% shareholding, PT Tiga Telekomunikasi
Indonesia holding a 10.8% shareholding, and other public
shareholders holding approximately 14.0%.
Subject to necessary Indosat Ooredoo shareholder approvals, the
Parties have agreed to nominate Vikram Sinha as CEO and Nicky Lee
as CFO of Indosat Ooredoo Hutchison. Ahmad Al-Neama will remain
President Director and CEO of Indosat Ooredoo and Cliff Woo will
remain as CEO of H3I until completion of the merger. Upon
completion, Ahmad Al-Neama and Cliff Woo will join the Board of
Commissioners of the merged company, subject to the necessary
Indosat Ooredoo approvals.
The Parties are committed to prioritizing employee welfare
during the integration process in adherence with applicable laws
and aligned with future business growth opportunities. The combined
company is expected to create exciting growth opportunities for
employees, as part of a larger, financially stronger, more
competitive and innovative technology company.
Aziz Aluthman Fakhroo, Managing Director of Ooredoo Group, said:
"This agreement is a significant step towards our shared vision of
creating outstanding value for our customers and shareholders by
bringing together two of Indonesia's leading telecoms brands to
create a stronger number two player in Indonesia, backed by two
highly committed partners in Ooredoo Group and CK Hutchison. With
this agreement in place, we can now turn our attention to closing
the transaction and then working closely with CK Hutchison to
leverage the combined expertise of our respective global telecoms
groups to build a world-class digital telco for Indonesia.
This merged company will deliver significant value and benefits
for all stakeholders including Indosat Ooredoo and Ooredoo Group
shareholders, for customers, employees and Indonesia. Through
economies of scale and the realization of synergies between these
highly complementary businesses, the merged company will be well
placed to deliver a higher return on investment for all
shareholders and build on the outstanding growth momentum already
achieved by Indosat Ooredoo. Importantly, the merger will create a
company with the strength and scale to accelerate Indonesia's
digital transformation and improve network performance and customer
experience across the country.
Finally, I would like to express our most sincere gratitude to
the Government of Indonesia for its progressive policies that are
enabling this consolidation and the creation of a more sustainable
telecoms industry, which will benefit customers, all operators,
local shareholders and the people of Indonesia. "
Canning Fok, Group Co-Managing Director of CK Hutchison Holdings
Limited, said: "This is a great opportunity to create a stronger
and more innovative telco player in Indonesia and will be an
accretive transaction for shareholders and other stakeholders
alike. Indosat Ooredoo Hutchison will have a critical mass that
will enable it to drive network expansion and improvements that
will support the Government's digital agenda and benefit customers
and Indonesia as a whole.
With greater scale, expanded spectrum, and a more efficient cost
structure, Indosat Ooredoo Hutchison will also be better positioned
to extend the rollout of its network and enhance service quality
and speed. CK Hutchison invests in and operates telecom businesses
in 12 markets around the world, many of which have successfully
rolled out 5G networks, and we look forward to expanding innovative
5G services in Indonesia when the time is right.
I would like to thank Ooredoo Group for the commitment to this
process. We have had fruitful discussions on how we can build a
strong business together over the past few months, and I look
forward to building a lasting and successful partnership
together.
Finally, I would also like to express gratitude to the
Government of Indonesia. Its foresight in creating an investment
friendly policy environment is helping to build a strong and
sustainable mobile market in Indonesia."
H.E. Sheikh Faisal Bin Thani Al Thani, Chairman of the Board of
Directors at Ooredoo Group, concluded: "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. I look forward to a long and
successful partnership with CK Hutchison and to working together to
build Indosat Ooredoo Hutchison into a digital champion for
Indonesia."
Completion of the transaction will be subject to the approval of
Ooredoo Group, CK Hutchison, Indosat Ooredoo shareholders,
regulatory approvals and other customary terms and conditions.
Assuming all approvals are received, 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.
As completion of the Proposed Transactions is conditional on the
satisfaction or waiver of certain legal and regulatory conditions,
there remains a possibility that the Proposed Transactions may not
proceed. Shareholders and potential investors are advised to
exercise caution when dealing in the securities of the Company
.
- Ends -
About Ooredoo Group
Ooredoo is an international communications company operating
across the Middle East, North Africa and Southeast Asia. Serving
consumers and businesses in 10 countries, Ooredoo delivers the
leading data experience through a broad range of content and
services via its advanced, data-centric mobile and fixed
networks.
Ooredoo generated revenues of QAR 29 billion as of 31 December
2020. Its shares are listed on the Qatar Stock Exchange and the Abu
Dhabi Securities Exchange.
About CK Hutchison
Listed on The Stock Exchange of Hong Kong Limited, CK Hutchison
Holdings Limited (CK Hutchison) is a renowned multinational
conglomerate committed to innovation and technology with businesses
spanning the globe. With operations in about 50 countries and
300,000 employees worldwide, CK Hutchison has four core businesses
- ports and related services, retail, infrastructure and
telecommunications.
CK Hutchison reported turnover of approximately HKD404 billion
(US$52 billion) for the year ended 31 December 2020. For more
information, please visit www.ckh.com.hk
About Indosat Ooredoo
Indosat Ooredoo (IDX: ISAT), a member of Ooredoo Group, is
building Indonesia's leading digital telco, enabling access and
greater connectivity for everybody and every business. Indosat
Ooredoo aspires to enrich the lives of Indonesians in the digital
world. The Company reported 60 million mobile customers as of 1Q
2021 and operates 66,313 4G BTS covers nearly 90% of the
population.
About H3I
H3I is one of the leading mobile communication service providers
in Indonesia operating a nationwide network. It has been in
commercial operation in Indonesia since 2007 and has grown into a
digital lifestyle provider, offering data, digital, voice, SMS,
international roaming and other mobile telecommunication services
to customers. H3I, under the brand '3', operates a licensed
national network of 2G, 3G/WCDMA and 4G LTE GSM. H3I has 10 MHz of
spectrum in the 1800 MHz band and 15 MHz of spectrum in 2100 MHz
band. H3I offers a rich mobile lifestyle experience to its
customers, supported by 4G LTE technology in close to 37,000
villages in Sumatera, Kalimantan, Sulawesi, Java, Bali and Lombok,
using approximately 16,000 km of fibre optic transmission
cables.
CONTACTS
CK Hutchison Holdings Limited Ooredoo Group
Hans Leung International
HansL@ckh.com.hk Malcolm Robertson
Malcolm.robertson@fticonsulting.com
Middle East
Rita Yared
rita.yared@wallispr.com
Hutchison 3 Indonesia Indosat Ooredoo
Fuad Arrasyid Steve Saerang
fuad@maverick.co.id steve.saerang@indosatooredoo.com
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END
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September 17, 2021 06:03 ET (10:03 GMT)
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