International Finance

Hutchison considers merging Indonesian business with Axiata

Telco wants to combine Indonesian wireless business with the Axiata's local unit; negotiations are yet to take place

Hong Kong-based Hutchison is considering merging its Indonesian telecommunications operation with that of Malaysian telecommunications conglomerate Axiata. Even though Hutchison has expressed an interest, any kind of negotiations between the companies are yet to take place.

Axiata in a statement told the media that, “Axiata has created significant value uplift and attractiveness for its operations and as evidenced in the last one year. We have attracted a lot of suitors to partner with us and seeking to acquire our assets including Telenor, Mitsui, Sumitomo, among others.”

Besides Hutchison’s interest, Axiata’s wireless tower business has also attracted takeover interest in recent months.

Axiata, which is Malaysia’s biggest wireless carrier, previously held talks with Norway’s Telenor to merge their Asian operations. The deal was set to create a company with more than 300 million customers spread across Asia but the proposed merger was called off. According to reports, complexities in the proposed transaction led to both the companies mutually agreeing to end discussions.

With the merger with Telenor being called off, Axiata might consider merging its Indonesian business with that of Hutchison’s.

Earlier this year, Hutchison Telecommunications Hong Kong bought stakes in Hutchison Telephone Company and Hutchison 3G from Japanese mobile phone operator Docomo.

Hutchison Asia Telecommunications, which houses CK Hutchison’s telecom business in Vietnam, Indonesia, and Sri Lanka, had about 45.7 million active customer accounts. According to reports, Indonesia accounted for 86 percent of Hutchison Asia’s total revenue in the first six months of 2019 which is $472 million.

Last month, CK Hutchison became the latest telecommunication group to restructure its assets into separate operation and infrastructure units. With its decision to jump into the tower bandwagon, the company will boast a portfolio of 28,500 towers spread across Europe.

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