Qatar-based Ooredoo Group announced this week (28 April) that it has extended the exclusivity period of the non-legally binding memorandum of understanding (MoU) with Hong Kong-based CK Hutchison to 30 June 2021, in relation to a potential transaction to combine their respective telecommunications businesses in Indonesia – Indosat Ooredoo and Hutchison 3 Indonesia (Tri). In a supplemental to its Q1 financials release, Ooredoo confirmed that it is hoped the extension ‘will provide more time to complete the ongoing due diligence and negotiate the final terms of a possible combination of the entities’.
As previously reported by CommsUpdate, in January this year Ooredoo and CK Hutchison entered into talks to merge their Indonesian units to allow them to better compete with larger players such as state-backed Telkomsel and Axiata-controlled XL Axiata. The two companies entered into an exclusive non-legally binding MoU, which was originally valid until 30 April 2021. At the time, the Qatar-based parent confirmed the development stating that it was ‘in the early stages of assessing the merits of such a potential transaction’, while CK Hutchison released a separate statement outlining that the potential transaction ‘is subject to due diligence, agreement on terms, signing of definitive agreements and obtaining all required corporate and regulatory approvals’.
TeleGeography notes that Indonesia recently passed a new law simplifying doing business and allowing spectrum sharing between telcos – a move designed to stimulate consolidation in the market – which the government considers is needed ‘to support telco companies [as they] prepare their investment for the initial deployment of 5G in Indonesia’.