Major Thai telecoms companies DTAC and True Corp. plan to merge to pursue opportunities in the tech sector, their parent companies said Monday.
Thai National Broadcast reported that regulators were asking the companies for clarification about the plan announced by Norway’s Telenor Group, parent company of DTAC, and Charoen Pokphand (CP) Holding, the parent firm of True.
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They notified the Stock Exchange of Thailand that their joint venture, Citrine Global Company, will make an offer for all shares of the two telecom companies.
The new company will be a leading telecommunications service provider able to speed up Thailand’s adoption of digital technology, Telenor said in a statement.
It also would make it a leader in the industry, with 51.3 million subscribers, 19.3 million from DTAC and 32 million from True. The current market leader, AIS, has 43.6 million subscribers.
“The telecom and technology sectors are key to enabling Thailand to move up the development curve and to create broad-based prosperity," it quoted C.P. Group CEO Suphachai Chearavanont as saying.
DTAC's share price jumped 9.1% on Monday, while True's soared 10.2%.
The newly merged company will apply to be listed on Thailand's stock exchange, the companies said.
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.
He said the new company plans to raise venture capital funding to invest in promising digital startups focusing on new products and services for Thais.
The plan was approved by the companies’ boards on Friday after a preliminary memorandum of understanding.
During the merger process DTAC, or Total Access Communication Plc., and True will operate as usual, the companies said.