Singtel backs amalgamation of Intouch and GULF to simplify AIS’s holding structure

Felicia Tan
3-min read

The telco will book an estimated gain of $0.4 billion from the amalgamation.

Singapore Telecommunications (Singtel) says that it supports the amalgamation of Intouch Holdings and GULF, Intouch’s largest shareholder. The amalgamation will simplify Singtel’s stake in its Thai associate, AIS, by removing Intouch as the intermediary company. The amalgamation will also result in Intouch and GULF being dissolved, with a new legal entity formed as a listed company in Thailand (NewCo).

Singtel and GULF own respective stakes of 24.99% and 47.37% in Intouch. Intouch, in turn, holds a 40.44% stake in AIS. GULF, Intouch and AIS are listed on the Thai stock exchange.

In exchange for its stake in Intouch, Singtel will receive a 9% stake in NewCo, which is expected to become one of the largest and most liquid Thai-listed companies. Singtel will also book an estimated gain of $0.4 billion from the amalgamation.

After the completion of the transaction, Singtel says it will consider its options for its stake in NewCo.

In connection with the amalgamation, Intouch and Gulf, as well as Gulf’s major shareholder, Sarath Ratanavadi, are required to conduct a conditional voluntary tender offer (VTO). Under the VTO, the parties will seek to acquire the remaining shares they do not own in AIS’s public float at THB216.30 ($8.07) per share.

Singtel, through its wholly-owned subsidiary, Singtel Strategic Investments, says it will take part in the VTO as a joint offeror with Gulf, Intouch and Ratanavadi. Singtel Strategic owns a 23.3% stake in AIS.

Singtel will be allocated the first 5% of shares in AIS tendered in acceptance of the offer, but it is not allowed to acquire more than 10% of the shares in AIS. There is no intention to privatise AIS yet, at this point, reads Singtel’s release on July 16.

"For some years now, Singtel and GULF, as major shareholders of Intouch, have been working to streamline the diversified holding structure of Intouch. We believe it is in the best interests of stakeholders to simplify AIS’s shareholding structure and are supportive of this move,” says Arthur Lang, Singtel’s group chief financial officer (CFO).

“We have always preferred to hold direct stakes in our associates and this amalgamation is a step in the right direction. In addition to the special dividend of THB4.50 per share which Intouch will be proposing for its board’s approval, we have the opportunity to increase our 23.3% direct stake in AIS, which has consistently been a strong brand and business, through this transaction,” he adds.

On Singtel’s decision to remain a long-term investor in Thailand, Lang says the country has been a “key market” in Southeast Asia for the telco since its initial investment in AIS 25 years ago.

“We see good growth potential with the rapid digitalisation and 5G adoption in the country and the mobile industry’s return to a more sustainable structure. We expect AIS to strengthen its position as it executes on its fixed mobile convergence strategy to deliver greater digital access. We will continue to invest in AIS with our Thai partner to help accelerate Thailand's digital transformation,” he says.

According to the Thai Ministry of Digital Economy and Society, Thailand’s digital economy is expected to contribute some 30% to its national GDP by 2027.

According to Singtel, AIS is uniquely positioned to benefit from the tailwinds of the rapid pace of digital transformation in Thailand, after it acquired internet service provider 3BB.

The transaction is expected to be completed by the second quarter of 2025, subject to customary regulatory approvals, approval from the shareholders of Intouch and GULF, and satisfaction of conditions precedent in the amalgamation agreement.

Shares in Singtel closed 4 cents higher or 1.33% up at $3.05 on July 16.

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