Telenor, CP Group to merge Thai telecom units in $8.6 bln deal

Telenor flag flutters next to the company’s headquarters in Fornebu, Norway, June 1, 2017. REUTERS/Ints Kalnins/File Photo

BANGKOK, Nov 22 (Reuters) – Norway’s Telenor (TEL.OL) and Thailand’s Charoen Pokphand Group (CP Group) have agreed to merge their telecom units in Thailand in a deal valued at 282.8 billion baht ($8.6 billion) to create a new market leader in the Southeast Asian country.

The deal, which Telenor flagged on Friday, would merge the operations of Telenor’s Total Access Communication (DTAC) (DTAC.BK) and CP Group’s True Corporation (TRUE.BK). read more

The announcement by the companies sent shares of DTAC and True Corp up 10% and 11.5%, respectively, on Monday.

The Thai benchmark (.SETI) was up 0.3%.

The offer of 47.76 baht ($1.45) per DTAC share represents a premium of 15.8% to its Friday close and the offer of 5.09 baht ($0.1549) per True Corp share represents a premium of 17.8% to its close on the same day.

“We need to enable faster and more value-creation from the network, delivering new technologies and innovations to customers,” CP Group CEO Suphachai Chearavanont said.

“This means the transformation of Thai businesses into tech-based companies is a vital step to maintain competitive edge amidst global competitors.”

Telenor and CP Group will aim for an ownership share of around one-third each in the merged entity, the companies said.

The merged entity, subject to regulatory approvals, would become a market leader with about 52% of subscribers in the country, surpassing Advanced Info Service Pcl (AIS) (ADVANC.BK).

AIS shares rose 6%.

The combined company will be listed on the Thai stock exchange.

($1 = 32.8600 baht)

Reporting by Radhika Anilkumar in Bengaluru and Chayut Setboonsarng in Bangkok; Editing by Muralikumar Anantharaman and Himani Sarkar

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