SINGAPORE - Singapore Telecommunications (Singtel) will spend about S$2.47 billion to buy a 21 per cent stake in Thailand's Intouch Holdings PCL and a further 7.39 per cent stake in Bharti Telecom (BTL) from Temasek Holdings for S$2.47 billion in cash.
The acquisitions gives it a unique opportunity to increase economic exposure to high growth telecom sectors Thailand and India, Singtel said in a filing to the Singapore Exchange before markets opened on Thursday (Aug 18).
The share purchases in the parent companies of the largest mobile-phone operators in India and Thailand will give Singtel a bigger foothold in the two markets, Bloomberg reported earlier.
In Thailand, Singtel already owns just over a fifth (23 per cent) of Advanced Info Service (AIS), while Intouch holds approximately 40.45 per cent of AIS and 41 per cent of Thaicom.
In India, Singtel currently holds a 39.78 stake in BTL, the parent company of Bharti Airtel. With its planned purchase of BTL shares, Singtel's stake in BTL will rise to 47.17 per cent.
Said Singtel: "Intouch and BTL own assets that are leaders in their respective markets, with strong track records of earnings growth. AIS and BAL have secured spectrum holdings for the long term and invested extensively in their networks. These investments position both companies well to compete and capture the growth in mobile internet services.
Intouch has an interesting history. It was formerly known as Shin Corp and in 2006, a Temasek-led US$3.8 billion investment in the Thal telecom company, then owned by the family of former Thai Prime Minister Thaksin Shinawatra, triggered a political crisis that led to Mr Thaksin's ouster in a bloodless coup.
Singtel's latest investments 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.
The deal, subject to shareholder and regulatory approvals, is expected to be completed by December, according to the statement.
Singtel is offering about 1.9 per cent less than Wednesday's closing price for Intouch shares. Bharti Telecom is closely held. The share placement to Temasek, already the majority shareholder in Singtel with 51 per cent as of May 30, is set at about 1.2 per cent below Wednesday's closing price.
Singtel shares were up 2 Singapore cents, or about 0.5 per cent, to S$4.23 as of 9:30amon Thursday. They have risen about 15 per cent this year, compared with the 1.4 per cent drop in the Straits Times Index.