Telenor in Thailand agrees to merge with competitor – stock rises

The Norwegian telecom giant Telenor has agreed on an agreement to merge the Thai subsidiary Dtac with competitor True. The company is owned by Thai Charoen Pokphand Group.

– We believe the new company can benefit from the digital shift to support Thailand’s leading role in digitization. We will do this by adopting global technological advances and by offering attractive services and quality products, says CEO Sigve Brekke in a press release.

When trading opened on the Oslo Stock Exchange on Monday, the Telenor share rose by approximately 1.6 per cent.

55 mill. customers

If the transaction is approved, a voluntary offer is made for all outstanding shares in the two companies, followed by a merger. The parties aim to be left with one third of the ownership of the merged company, which is scheduled to be listed on the stock exchange in Thailand.

The new company will have approximately 55 million customers and a combined turnover for 2020 of around NOK 62 billion. Telenor and CP Group aim to complete the company review during the first quarter of next year.

The merged company will also raise venture capital of between 100 and 200 million dollars, up to 1.8 billion kroner, to invest in digital start-up companies, the report states.

CP Group CEO Suphachai Chearavanont emphasizes that the telecom and technology sectors are central to development and growth in Thailand in the press release.

– As a telecommunications and textile company, we can help unleash the enormous potential of Thai companies and digital entrepreneurs. It will also allow us to attract the best from all over the world to do business in Thailand, he says.

To strengthen Asian engagement

When the discussions about the merger became known before the weekend, analyst Petter Kongslie wrote in Sparebank 1 Markets that it was “obvious that Telenor is trying to leave Asia”.

Executive Vice President Jørgen A. Rostrup, Head of Telenor Asia, says, however, that the transaction will strengthen Telenor’s presence in the region.

– We have a long-term commitment, both in Thailand and in Asia, and it will be strengthened by this collaboration. Our access to new technologies, as well as the best human capital, will be a very important contribution to the new company, he says in Monday’s press release

Telenor’s CEO Sigve Brekke has been the most central person in Telenor’s Thailand initiative. He has a close relationship with the companies in Asia as head of the region, and has been top manager of Dtac, which will now be merged.


Telenor CEO Sigve Brekke in Thailand during a Dtac meeting in 2010 when he was Telenor's Asia CEO.

Telenor CEO Sigve Brekke in Thailand during a Dtac meeting in 2010 when he was Telenor’s Asia CEO. (Photo: Peter Charlesworth / LightRocket / Getty Images)

Charoen Pokphand Group is one of Asia’s largest conglomerates, controlled by Dhanin Chearavanont and his family. The family is one of the richest in Southeast Asia with a fortune of $ 12.7 billion, according to Forbes. The family is also known for having very good political contacts in Thailand and China.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases using a link, which leads directly to our pages. Copying or other use of all or part of the content may only take place with written permission or as permitted by law. For further terms see here.