Singtel has entered conditional share purchase agreements with Temasek to acquire 21% of Intouch Holdings and 7.39% of Bharti Telecom for a total consideration of SG$2.47 billion. The acquisitions will be settled fully in cash.
According to a press statement, the acquisition is part of Singtel’s long-term strategy to expand its portfolio in the region and exposure to high-performing associates.
“Thailand and India are fundamentally attractive markets which are reaping the benefits of rapidly increasing smartphone penetration and mobile data adoption by a growing middle class,” the press statement said.
Intouch is the biggest shareholder in Thailand’s largest mobile operator Advanced Info Services Public Company Limited (AIS). Meanwhile, Bharti Telecom is the holding company of Bharti Airtel Limited (Airtel), India’s largest telecommunications company which has operations in 18 countries across South Asia and Africa.
“Singtel has been a strategic partner to both AIS and Airtel for more than 15 years. We have built deep and trusted relationships, worked well together through the years, sharing knowledge and expertise and we have grown together, from strength to strength. Today, they have a combined mobile customer base of more than 380 million across Asia and Africa. This is a unique opportunity for us to deepen our relationships with two great market leaders,” Chua Sock Koong, Singtel group CEO, said.
Chua said Thailand, India and Africa continue to be attractive, high-growth markets for us.
“As a group, we enjoy great synergies, economies of scale, and collaborative innovation,” Chua added.
AIS and Airtel have been associates of the Singtel since it acquired stakes in these businesses in 1999 and 2000 respectively.
The transaction will be funded through internal cash, short-term debt and proceeds from a share placement of 386 million new Singtel shares to Temasek totalling S$1.605 billion at a price of S$4.16 per new share.
Singtel will pay Temasek THB60.83 for each share of Intouch and INR235.62 for each share of Bharti Telecom. The transaction is subject to the fulfilment of certain conditions precedent, including shareholder and relevant regulatory approvals, and is expected to be completed by December 2016.
An independent financial adviser will be appointed to advise the independent directors of the Board.