True and dtac to merge in $8.6 billion deal, forming a new Thai market leader

Major Thai telecoms companies DTAC and True Corp. are planning to merge in order to pursue opportunities in the tech sector, their parent companies said Monday.

The merger will be part of a $8.6 billion deal to create a firm with just over half the mobile subscribers in the Southeast Asian country.

TeleGeography reports that a merger proposal has been signed on Monday, which includes an agreement that allows the companies to create a merged entity via an equal partnership.

As such, the firms suggested that the merged unit would ask to be listed on the SET, and have agreed to a different share swap ratio for each operator.

“The telecom and technology sectors are key to enabling Thailand to move up the development curve and to create broad-based prosperity,” C.P. Group CEO Suphachai Chearavanont said to local media.

DTAC’s share price jumped 9.1 percent on Monday, while True’s soared 10.2 percent.

On his part, Jørgen A. Rostrup, Telenor executive vice president and head of Telenor Asia said the plan reflected the company’s commitment to the region.

“Our access to new technologies as well as the best human capital will be a vital contribution to the new company,” Rostrup said.

It is worth mentioning that the Thai mobile market has already seen some consolidation this year, with state-backed operators CAT Telecom and TOT merging to form National Telecom (NT) in January 2021.

Singtel-backed AIS leads the market with a share of around 44.5 percent, while True Corp and dtac respectively have around 32.6 percent and 19.6 percent. The merged entity will therefore take a market share of over 50 percent, placing it ahead of AIS.