Adhi Karya and PT PP target merger by late 2026

The Indonesian government aims to complete the merger between PT PP Tbk (PTPP) and PT Adhi Karya Tbk (ADHI) by the end of 2026. This move comes amid significant financial challenges for both state-owned construction firms. As of the first half of 2026, ADHI reported total liabilities of Rp 24.21 trillion, representing 88% of its assets, while PTPP reported liabilities of Rp 38.98 trillion, or approximately 89.89% of its assets.

In response to shareholder directives, ADHI plans to undergo a “back to core” strategy. This involves divesting from business sectors that do not align with its primary competency as a contractor, specifically targeting its interests in toll roads and water supply sectors. ADHI currently holds interests in several toll road entities, including Jasamarga Jogja Solo and Jasamarga Bali Tol.

Despite high debt levels, both companies have been heavily involved in major national infrastructure projects, including the development of the New Capital City (IKN), various toll roads, and smelters.