ICC Comprehensively Assesses The Merger of Hutchinson with Indosat.

Tuesday, July 5, 2022

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Jakarta (22/4) – Indonesia Competition Commission (ICC) stipulates that the notification of the merger transaction of PT Hutchinson 3 Indonesia with PT Indosat, Tbk. will be conducted through a Comprehensive Assessment process. This was stipulated by ICC in a Commission Meeting held on April 20, 2022. Such Comprehensive Assessment will be conducted in 90 (ninety) days at the latest, up to circa September 7, 2022. This Comprehensive Assessment period can change if the Government issues regulations and/or policies on new collective leave or national public holiday.

PT Indosat, Tbk. (Indosat) notified ICC for the merger of PT Hutchinson 3 Indonesia (Hutchinson) with Indosat on January 26, 2022. Considering that the legal entity status of Hutchinson ended legally on January 4, 2022, the notification is still within the permitted notification period to ICC (less than 60 days after the legally effective date). In the aftermath of the notification, ICC clarified the completeness of documents and studied the merger transaction.

Based on the result of the study conducted by ICC with regard to the calculation of the market concentration through the Herfindahl–Hirschman Index (HHI), ICC concludes that the HHI value for the transaction is above 2,500 and the change in HHI before and after the transaction is above 150. This means that on the basis of the concentration analysis, the assessment of transaction has been conducted through a Comprehensive Assessment. The assessment will be focused on several analyses such as barriers to market entry including government policies in the cellular telecommunications services market, anti-competitive behaviour potentials, efficiency, and/or bankruptcy. Following the assessment, ICC will issue a Stipulation which can be in the form of the existence or nonexistence of alleged monopolistic practices and/or unfair business competition; or conditional approval of the transaction.