The amalgamation of the telecom operations of dtac and True into a new telecom tech company named True Corporation Public Company Limited has today been completed.
The new company combines the strength of dtac and True to create a future-fit leading telecom tech company at the forefront of digitalisation in Thailand and the combined company is well placed to serve Thailand’s increasing demand for high-speed data and capture growth opportunities in a fast-changing digital world.
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The transaction is the largest telco merger in Southeast Asia by combined enterprise value and the new company will be among the largest companies traded at the Stock Exchange of Thailand, after its listing is completed. On a proforma basis for the financial year 2022, the company will serve an estimated 55 million mobile customers, 5 million broadband connections and 3.2 million pay-tv subscribers, and have revenues of around USD 6.2 billion (around NOK 64 billion) and an EBITDA of around USD 2.4 (around NOK 25 billion).
The transaction marks another step on the strategic road map Telenor presented at the Capital Markets Day in September 2022, to develop a strong and more independent portfolio in Asia. In line with earlier communication, Telenor acquires shares for a total consideration of around NOK 3 billion, which will result in an ownership share of 30.3 percent.
Based on Telenor’s full-year figures for 2022, the company will deconsolidate dtac’s revenues of around NOK 22 bn, EBITDA of around NOK 8 billion and net debt of around NOK 20 billion. The impact on Telenor’s leverage ratio following the transaction will be limited.
Telenor expects the new company to realise significant opex and capex synergies after an initial phase of integration cost. For Telenor’s shareholders, the combined net synergies from the transactions in Malaysia and Thailand are estimated to be in the range of NOK 20-25 billion on a net present value basis, confirming the value potential presented at the Capital markets day. Due to integration costs, Telenor does not expect dividend from the merged company in 2023. In 2025, the new company is expected to contribute to Telenor’s cash flow approximately in line with the dividend received from dtac in 2022. After 2025 the cash flow from the new company is expected to be dividend accretive for Telenor.
The transaction will generate a significant accounting gain for Telenor. Based on market value and the THB/NOK on the last trading day of dtac 17 February 2023, Telenor estimate an accounting gain of around NOK 20 billion to be recognised in Q1 2023. The final gain calculation will take place once the new company has completed its first trading day on the stock exchange.
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