Norwegian Telenor and the Thai group Charoen Pokphand Group (CP Group) have agreed to merge their telecommunications units in Thailand into a $ 8.6 billion deal to set up a company with more than half of the country’s mobile subscribers. of SE Asia.
The deal, announced by Telenor on Friday and subject to regulatory approvals, is likely to give ownership of one-third of the merged entity to each of Telenor and CP Group.
The partnership will better equip the two companies against the market leader, Advanced Info Service (AIS) and give them a deeper pocket to face the increased investment costs for 5G.
Telenor will merge Total Access Communication (Data) with CP Group’s True Corporation, with the exchange ratio set at 10,221 True shares for each of Dtac.
“The merged company of Telenor and CP Group will have a market share in revenue of 40%, which is similar to that of AIS,” said Telenor CEO Sigve Brekke.
“AIS is still a big brother in terms of profitability, so we will learn as we go along,” he said.
“Telenor ‘s decision to merge its holdings in Thailand with True comes as no surprise, given the mergers and acquisitions of its subsidiary ASEAN,” said a Jefferies analyst, referring to a similar deal the company concluded in Malaysia earlier this year. .
Telenor expects the authorities to view the agreement positively, CFO Tone Hegland Bachke told a news conference.
“We are confident that we will receive regulatory approval,” he said.
Source From: Capital