True and Dtac secure board approval for Thai merger
True and Total Access Communication – AKA Dtac – have received approval from their respective boards and entered into an agreement to create the new, listed telecom-tech company, they first announced last year.
The deal, announced in November, is estimated to be worth $8.6 billion and the new – still unnamed – company will be listed on the Stock Exchange of Thailand.
Telenor became a shareholder of Dtac in 2001 while True is a subsidiary of CP Group, which owns a 49% share according to its own website. Both CP Group and Telenor will be shareholders in the amalgamated company, but their stakes have yet to be determined.
After regulatory approval there will be a voluntary tender offer (VTO) where all shareholders of True and dtac will have the choice to participate in the tender or continue as shareholders in the new company. The outcome of the VTO will determine the final equalised ownership percentage between CP Group and Telenor.
“The new company will have scale to both invest in network quality and make technology advancements that meet the changing needs of Thai consumers and support Thailand’s digital growth," said Jørgen Arentz Rostrup (pictured), SVP and head of Telenor Asia.
"This ensures telecom services that are attractive, affordable, and which enable innovation and partnerships for a wide range of new products,”
The new enterprise is described as "a merger of equals that will combine skills and expertise from True and dtac and offer employees new opportunities at the forefront of digitalisation".
In the marketplace it will focus on supporting Thailand’s digital transformation by bringing new partnerships and global technology advancements to the country. Together with its partners it is seeking $100 million to $200 million in venture capital to support "promising digital start-ups focusing on new products and services that benefit Thai consumers".
Despite this telecoms will remain core to the proposition, with 4G and 5G services provided and the promise of "better network quality, reliability, and speed".
Although they have received board approvals, details on how the two firms will be integrated are yet to be confirmed. It is expected the transaction will be complete within 2022, meaning the current operations of True and dtac will remain independent until then.