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C.P. Group and Telenor Group are exploring the creation of a new telecom-tech company comprising of True and dtac. The new company will 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.

Mr. Suphachai Chearavanont, chief executive officer of C.P. Group and chairman of the board of True Corporation said, “The telecom and technology sectors are 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 IoT, AI, Cloud and new generations of mobile network technologies will have a huge effect on the way we do everything,” he said.

Mr. Sigve Brekke, president and chief executive officer of Telenor Group, said, “We have experienced an accelerated digitalisation of Asian societies, and as we move forward, both consumers and businesses expect more advanced services and high-quality connectivity. We believe that the new company can take advantage of this digital shift to support Thailand’s digital leadership role, by taking global technology advancements into attractive services and high-quality products.”

Mr. Jørgen A. Rostrup, executive vice president of Telenor Group and head of Telenor Asia said, “The proposed transaction will advance our strategy to strengthen our presence in Asia, create value, and support long-term market development in the region.  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.”

Mr. Rostrup added that the new company has the intention to raise venture capital funding together with partners of USD 100-200 million 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. The VTO price for dtac will be THB 47.76, which represents a 25 percent premium to the one-month VWAP for dtac shares, and the VTO price for True will be THB 5.09, which represents a 25 percent 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 equalized ownership percentage between C.P. Group and Telenor Group.

All shareholders of dtac and True will have the choice of participating in the tender offer or continue as shareholders in the combined company, which will be listed on the stock exchange of Thailand. The combined company faces a challenging operational environment over the next years and C.P. Group and Telenor Group recognize that not all shareholders may want to participate in this journey, which is why a cash alternative at an attractive premium is offered. The involved parties aim to reach the necessary agreements by Q1 2022.

The current operations of True and dtac will continue to run their businesses independently until the transaction is completed. The transaction will be subject to approvals by relevant boards and shareholders and customary regulatory approvals, and the parties acknowledge that there is no certainty as to the completion of the transaction.

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