DTAC and True prepare for Thai telco mega-merger
- 22 November, 2021 16:29
The respective owners of Thai telco operators True and DTAC are in the process of striking a deal that could see the two companies merge in a move that will pave the way for the creation of a combined company with around 55 million customers.
Telenor, the Norwegian owner of DTAC, and True parent C.P. Group, have agreed to explore the creation of a new company comprising their telco companies in Thailand with the aim of creating a “leading telecommunications service provider with capabilities to accelerate Thailand’s progressive digital technology agenda”.
It is estimated that the pro-forma revenues of the resulting combined entity, which would be a self-described “telecom-tech” company, would be around US$6.9 billion in 2020 alone.
True and DTAC are already individually among the largest mobile network operators in Thailand.
“The telecom and technology sectors are key to enabling Thailand to move up the development curve and to create broad-based prosperity,” said Suphachai Chearavanont, CEO of C.P. Group and chairman of True Corporation.
“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 IoT, AI, cloud and new generations of mobile network technologies will have a huge effect on the way we do everything,” he said.
For Telenor, which earlier this year sold off its Myanmar mobile telco business amid political unrest in that country, it is expected there will be significant opportunities in Asia coming from digitalisation and technical advancements in the coming years.
As such, it is thought the proposed transaction will advance Telenor’s value-driven strategy to strengthen its presence in Asia.
“The proposed transaction will advance our strategy to strengthen our presence in Asia, create value and support long-term market development in the region,” said Jørgen A. Rostrup, executive vice president of Telenor Group and head of Telenor Asia.
“We have a long-standing commitment to both Thailand and the Asian region, and this collaboration will strengthen it further. Our access to new technologies as well as the best human capital will be a vital contribution to the new company,” he added.
As reported by the Bankok Post, the proposed merger is set to be scrutinised by the National Broadcasting and Telecommunications Commission (NBTC).
However, if the transaction proceeds, it will consist of a conditional voluntary tender offer (VTO) for all outstanding shares of DTAC and True, followed by an amalgamation of the two companies.
Depending on the tendering in the VTO, Telenor and C.P. Group will aim for an ownership share of around a third each in the merged entity. The company will also be listed on The Stock Exchange of Thailand.
DTAC and True will continue to run their businesses independently until the transaction is completed, with the respecitve parties aiming to reach the necessary agreements by the end of the first quarter in 2022.
The transaction remains subject to approvals by relevant boards and shareholders, as well as customary regulatory approvals.
In September, Telenor doubled down on its decision to withdraw from Myanmar through the sale of its business in the troubled country, expressing deep concern about the ‘deteriorating’ human rights and security situation in the nation.
In July, just days after moving to quell rumours it was planning to sell off its Myanmar mobile telco business, Telenor revealed it had struck a deal to sell its Telenor Myanmar subsidiary to Lebanese conglomerate M1 Group for US$105 million.
The move came after months of hardship for Telenor Myanmar and, indeed, all other telco operators in the country, after Myanmar’s military declared a state of emergency in February, subsequently shutting down mobile internet across the country.