Telenor's Dtac to Merge With True, Taking Market Structure to 2 MNOs; Maintaining FVE

Telenor has agreed to merge its Thailand business, Dtac, with True, owned by conglomerate CP Group, in a deal that expects to create the largest telecommunications provider in Thailand. The deal values Dtac at THB 47.76 per share, but the shares are trading at a slight discount (THB 45 at the time of the writing), which we believe is explained by the regulatory approval still required. Telenor shares are up 1.5% at the time of the writing. We are maintaining our fair value estimate and narrow moat rating for Telenor, which owns 66% of Dtac.