Hong Kong conglomerate CK Hutchinson is merging its Indonesian telecommunications business with that of Qatar’s Ooredoo Group in a $6-billion marriage, according to the Financial Times.
The companies will each own half of the new Ooredoo Hutchinson Asia, which, in turn, will own 65.6 percent of the new entity, to be called Indosat Ooredoo Hutchinson.
The merger will create Indonesia’s second-largest telecoms business, with annual sales of $3 billion to 100 million customers, the two companies said in a joint statement.
The combination also will allow the new company to streamline $300 million to $500 million in costs, they noted.
The new company will be better able to capitalize on the growth of fiber optic cable services and 5G wireless across the country, the statement said, and gives the resulting entity “critical mass” to help the Indonesian government fulfill its telecommunications agenda, Canning Fok, a director of CK Hutchinson Holdings, said in a statement quoted by the FT.
The deal is Indonesia’s second-largest M&A ever, according to Dealogic.
(To review the many dangers of 5G, see “Beyond Your Health, 5G Wireless Technology Destroys Jobs, Environments, Liberties,” 15 May 2019.)
TRENDPOST: The new company reduces competition and likely gains a monopoly on services across a larger swath of the island nation.