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BUSINESS

Norway’s Telenor, Thailand’s CP Group to merge telecom units

22/11/2021 07:57 PM

By Linda Khoo

BANGKOK, Nov 22 -- Thailand’s Charoen Pokphand Group (CP Group) and Norway’s Telenor Group announced today that they have agreed to merge their telecom units in Thailand in exploring the creation of a new telecom-tech company to accelerate Thailand’s progressive digital technology.

The merger deal of Telenor’s Total Access Communication (DTAC) and CP Group’s True Corporation is valued at 282.8 billion baht (100 baht =RM12.70) and the merged company would become a market leader with about 52 per cent of subscribers in the country, according to Reuters.

In a statement, Telenor Group said the new company would be a merger of equals and bring the best of the two local companies, with the support of its key sponsoring shareholders.

“The new company will be a leading telecommunications service provider with capabilities to accelerate Thailand’s progressive digital technology agenda in terms of network performance, innovation, investment strength and employer brand,” it said.

The two companies today signed a memorandum of understanding for an equal partnership to form a new company.

The merger plan was approved by their respective executive boards on Friday. The decisions were forwarded to the Stock Exchange of Thailand (SET) on Monday.

In its advice to the SET, Telenor Asia Pte Ltd, which is a major shareholder of the DTAC, said it would explore the feasibility and develop the terms of amalgamation as contemplated.

Telenor Group executive vice president and Telenor Asia head Jørgen A. Rostrup said the new company intended to raise venture capital funding, together with partners, of US$100 million to US$200 million (US$1=RM4.19) to invest in promising digital startups focusing on new products and services for the benefit of all Thai consumers.

“If the transaction proceeds, it will consist of a voluntary tender offer (VTO) subject to satisfaction of conditions for all outstanding shares of DTAC and True, followed by the amalgamation of DTAC and True creating a new company,” he said.

The VTO price for DTAC will be 47.76 baht which represents a 25 per cent premium to the one-month volume-weighted average price (VWAP) for DTAC shares, and the VTO price for True will be 5.09 baht, which represents a 25 per cent premium to the one-month VWAP for True shares.

The agreed exchange ratio is 10.221 True shares per DTAC share. The outcome of the VTO will determine the final equalised ownership percentage between CP Group and Telenor Group.

CP Group chief executive officer and True Corporation board chairman Suphachai Chearavanont said the telecom and technology sectors were key to enabling Thailand to move up the development curve and to create broad-based prosperity.

“As a telecom-tech company, we can help unleash the enormous potential of Thai businesses and digital entrepreneurs as well as attract more of the best and the brightest from around the world to do business in our country.

“Today is a step forward in that direction. We hope to empower a whole new generation to fulfil their potential to become digital entrepreneurs leveraging an advanced telecom infrastructure. The emergence in Thailand of Internet of things, artificial intelligence, cloud and new generations of mobile network technologies will have a huge effect on the way we do everything,” he said.

-- BERNAMA


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