(Bloomberg) — Thailand’s telecommunications regulator cleared a planned merger between Telenor ASA’s local unit and True Corp Pcl with some conditions, removing the final hurdle in creating the Southeast Asian nation’s largest mobile operator.
(Bloomberg) — Thailand’s telecommunications regulator cleared a planned merger between Telenor ASA’s local unit and True Corp Pcl with some conditions, removing the final hurdle in creating the Southeast Asian nation’s largest mobile operator.
The National Broadcasting and Telecommunications Commission said late on Thursday that Telenor’s Total Access Communication Pcl and True may proceed with the merger through an all-share deal, first announced almost a year ago.
The regulator tied the merger to a number of conditions to protect consumer interests and ensure fair competition in the industry. The five-member board of the commission, which held a marathon 11-hour meeting, was split on clearing the deal with the chairman exercising his powers to greenlight the merger, the commission said. One member abstained from voting, it said.
The combined entity, valued at $7.3 billion at Thursday’s closing price, will have more mobile subscribers than Advanced Info Services Pcl, the current market leader. Total Access, known as Dtac, and True, backed by Thai conglomerate Charoen Pokphand Group and China Mobile Ltd., are seeking to expand their presence in internet and startup ventures by joining forces.
The delayed approval comes after some consumer groups and Advanced Info, backed by Thai billionaire Sarath Ratanavadi and Singapore Telecommunications Ltd., raised concerns about industry monopoly.
“The next step in the merger is for Dtac and True to discuss these conditions with the NBTC. If the merged entity accepts the conditions, the merger will proceed and the tender offer process can start within a month from today,” Phatipak Navawatana, an analyst Krungsri Securities, wrote in a note Friday. “The merger is expected to be completed by the end of the year.
Under the terms of the proposed merger, first announced in November last year, True shareholders will receive 0.60018 shares in the new company for every stock held, while Total Access holders will get 6.13444 shares for every stock owned. True and Total Access will also make a tender offer for shareholders who oppose combining the two companies.
The regulator’s board outlined five areas of concern including the service rates, market obstruction, quality of service, spectrum holding and shared infrastructure, and the country’s digital divide.
The new entity will be listed on the Stock Exchange of Thailand, the companies have said. The CP Group would own 29% of the merged entity, Telenor would hold 27% and China Mobile would have 10.4% with the rest being held by minority holders, according to the filing.
True shares rose as much as 2% before trading 1% lower at 5.05 baht at 11:55 a.m. in Bangkok, while Total Access trimmed gains to 0.5% after climbing 2.2% earlier.
(Adds share moves in final paragraph.)
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