Telenor’s Dtac to merge with True in Thailand in $ 8.6 billion deal

CP Group and Telenor have agreed to explore the merger of their mobile operators True and dtac in an $ 8.6 billion deal.

The new company intends to raise venture capital funds with partners of $ 100-200 million to invest in promising digital startups focused on new products and services for the benefit of all Thai consumers.

The transaction will consist of a conditional voluntary takeover bid (VTO) for all of the outstanding shares of dtac and True, followed by the merger of dtac and True creating a new company.

The VTO price for dtac will be 47.76 THB, which is a 25% premium over the one-month VWAP for dtac shares, and the VTO price of True will be 5.09 THB, which is a 25% premium over a month’s VWAP for Real Shares.

The agreed exchange ratio is 10.221 true shares per dtac share. The result of the VTO will determine the final equalized percentage of ownership between CP Group and Telenor Group.

All dtac and True shareholders will have the choice of participating in the takeover bid or continuing as shareholders of the combined listed company in Thailand.

CP Group and Telenor Group recognize that not all shareholders may want to participate and offer an attractive premium cash alternative. The merged company faces a difficult operating environment.

Dtac reported a turnover of NOK 5,335 million in the second quarter of 2021 compared to NOK 6,013 million in the second quarter of 2020. Dtac’s investments increased to NOK 977 million from NOK 432 million.

Dtac’s subscription and traffic revenues fell 2% and EBITDA fell 1% in the second quarter. Dtac said the number of subscriptions increased from 164,000 to 19.249 million.

The current operations of True and dtac will run their activities independently until the transaction is completed. The transaction will be subject to the approvals of the boards of directors and relevant shareholders and customary regulatory approvals.

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