Singapore Telecommunications Limited (Singtel) has on Tuesday announced its support for the amalgamation of Intouch Holdings and GULF, Intouch’s largest shareholder, which will create a leading digital and energy infrastructure player in Southeast Asia (NewCo).

This group restructuring will simplify Singtel’s shareholding in its Thai associate AIS by removing Intouch as the intermediary holding company, Singtel said in a statement.

Currently, Singtel and GULF hold 24.99 percent and 47.37 percent in Intouch respectively while Intouch holds 40.44 percent in AIS, with all three entities listed on the Thai stock exchange.

In exchange for its stake in Intouch, Singtel will receive an approximately 9 percent stake in NewCo, which is expected to become one of the largest and most liquid listed companies in Thailand.

Singtel will also book an estimated gain of S$400 million ($298 million) from the amalgamation.

After the completion of the transaction, Singtel will evaluate options for its stake in NewCo as it continues to be a long-term investor in Thailand while proactively managing capital to create value for shareholders in line with its Singtel28 strategy.

“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’ shareholding structure and are supportive of this move,” said Arthur Lang, Singtel’s Group Chief Financial Officer.

“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 THB 4.50（$0.12） per share which Intouch will be proposing for its board’s approval, we have the opportunity to increase our 23.3 percent direct stake in AIS, which has consistently been a strong brand and business, through this transaction,” he added.

As part of the transaction, Singtel will participate in a conditional voluntary tender offer with GULF, Intouch and GULF’s major shareholder Sarath Ratanavadi to acquire all other shares in AIS’ public float at THB 216.3 ($5.97) per share.

Singtel will be allocated the first 5 percent of shares in AIS tendered in acceptance of this offer and the maximum number of shares it can acquire will not exceed 10 percent of shares in AIS.

There is no intention to privatize AIS at this juncture, said the statement.

“Thailand has been a key market in the Southeast Asia region for Singtel since we made our initial investment in AIS some 25 years ago,

“We see good growth potential with the rapid digitalization and 5G adoption in the country and the mobile industry’s return to a more sustainable structure,” Lang added.

He expects AIS to strengthen its position as it executes on its fixed mobile convergence strategy to deliver greater digital access.

He said the firm will continue to invest in AIS with its Thai partner to help accelerate Thailand’s digital transformation.

It is noted Thailand’s digital economy is expected to contribute 30 percent to national gross domestic product (GDP) by 2027 and the rapid pace of digital transformation in the country presents significant opportunities in both the consumer and enterprise space.

Singtel opined that AIS is in a unique position to benefit from these tailwinds following the acquisition of internet service provider 3BB which strengthened its fixed mobile convergence strategy.

According to the statement, 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.

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