The telecom companies Total Access Communication Plc (DTAC) and True Corporation Plc have agreed to merge, to pursue new tech business and raise venture capital for startups.
Their respective executive boards approved the merger plan on Friday, and their decisions were forwarded to the Stock Exchange of Thailand on Monday. In addition to signing the memorandum of understanding, the two companies announced they would merge to form a new firm to pursue technology.
A statement to the SET said they will “explore the feasibility of, and take the necessary steps to implement, the potential merger” of the listed companies.
In an unbinding memorandum of understanding, the two companies agreed to study amalgamating their businesses.
According to the swap ratio, one existing share in DTAC equals 24.5 shares in the new company, and one share in True equals 2.4 shares. They indicated the proposed company would apply to be listed on the SET.
Joint venture companies of Telenor Asia and Charoen Pokphand (CP) Holding will make an unconditional voluntary tender offer to buy all shares of the two companies – 5.09 baht per True share and 47.76 baht per DTAC share.
According to a separate joint announcement from Telenor and CP, True and DTAC will form an equal partnership to develop new tech companies, create an ecosystem, and establish a venture capital fund.
Telecom giants expand into new tech frontiers
Business as usual will continue at DTAC and True throughout the transformation. True and DTAC are committed to doing due diligence together and taking the steps needed to comply with the law.
CP’s chairman and CEO, Suphachai Chearavanont, said the new company will continue to offer telecom services but expand into new tech frontiers, such as artificial intelligence, cloud computing, the internet of things, digital media, and smart devices.
The new firm will also raise venture capital to focus on local and foreign startups as well as have a plan to study space technology to incorporate into its business, he said.
Mr. Suphachai said the transformation into a tech company is part of Thailand 4.0’s strategy to become a regional technology hub.
Telenor President and CEO, Sigve Brekke, said, “We believe the new company can take advantage of this digital shift to support Thailand’s role as a digital leader by incorporating global technology advancements into attractive services and products.”
The proposed transaction will allow Telenor to strengthen its presence in Asia, create value and assist in the long-term development of the region, said Jorgen A Rostrup, executive vice president of Telenor Group and head of Telenor Asia.
He said the firm will raise venture capital funding from partners of US$100-200 million to invest in promising digital startups.
Source: Bangkok Post