Indosat Ooredoo Will Merger With Tri Indonesia

Indosat Ooredoo (doc. Indosat Ooredoo)

JAKARTA - Telecommunication operator Tri Indonesia is rumored to be opening a merger agreement with Indosat Ooredoo. Talks about the merger of the two telecommunications companies have even been discussed at the central level.

Reporting from Bloomberg, Tuesday, December 22, it was stated that PT Indosat Tbk (ISAT), Ooredoo QPSC is in the middle of completing a further discussion with CK Hutchison Holdings Ltd from Hong Kong, which is the parent company of Tri Indonesia.

His second merger offer even involved a stock and cash offering. Where the merger of the two parties will create a new entity that will be formed later.

"The deal will involve offering in cash and shares. The two companies (Hutchison and Ooredoo) are set to become significant shareholders in the joint entity," said the source.

From the source who did not wish to be named, the announcement of the merger will be made soon this week. However, the structure of the business combination agreement has not yet entered its final stage and may still experience delays or even cancellations.

Ooredoo currently controls 65 percent of ISAT shares and has shot up to 90 percent this year, which brings this market valuation to above 2.2 billion US dollars. ISAT's revenue in 2019 contributed to 23 percent of Ooredoo's total EBITDA in 2019.

Previously, last year, CK Hutch also discussed the possibility of a merger with Axiata Group Bhd, which owns PT XL Axiata Tbk (EXCL) in Indonesia. The business group owned by Victor Li expressed interest in merging its telecommunication business in Indonesia with EXCL.

"The deal will involve offering in cash and shares. The two companies (Hutchison and Ooredoo) are set to become significant shareholders in the joint entity," said the source.

Based on the latest preliminary financial reports, CK Hutch's company, Hutchison Asia Telecommunications, has 48.8 million subscribers in three countries, namely Indonesia, Vietnam and Sri Lanka. Tri Indonesia operators themselves contributed 3.95 billion Hong Kong dollars or around IDR 7.2 trillion, or 87 percent of Hutchison Asia's total revenue in the first half of 2020.