© Reuters. File picture: On June 1, 2017, the Telenor flag flies next to the headquarters of Fornebu, Norway. REUTERS/Ints Kalnins/File Photo
Bangkok (Reuters)-Norway’s Telenor and Thailand’s Charoen Pokphand Group (CP Group) have agreed to merge their telecommunications divisions in Thailand for 282.8 billion baht ($8.6 billion) to create a new The market leader.
The deal announced by Telenor on Friday will merge the businesses of Telenor’s Total Access Communication (DTAC) and CP Group’s True Corporation.
On Monday, the announcements of the two companies increased the shares of DTAC and True Corp by 10% and 11.5%, respectively.
Thailand’s benchmark index rose 0.3%.
The quotation of 47.76 baht (US$1.45) per DTAC stock represents a 15.8% premium to Friday’s closing price, while the quotation of True Corp’s share of 5.09 baht (US$0.1549) represents a 17.8% premium to the closing price of the day.
“We need to achieve faster and more value creation through the Internet, and provide customers with new technologies and innovations,” said Suphachai Chearavanont, CEO of CP Group.
“This means that transforming Thai companies into technology companies is an important step in maintaining a competitive advantage among global competitors.”
The two companies stated that Telenor and CP Group aim to each own approximately one-third of the combined entity.
With regulatory approval, the combined entity will become the market leader with approximately 52% of subscribers in the country, surpassing Advanced Info Service Pcl (AIS).
AIS shares rose 6%.
The combined company will be listed on the Stock Exchange of Thailand.
(1 USD = 32.8600 baht)
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