China Mobile has announced a 5.5 billion yuan ($880.6 million) deal to acquire an 18% stake in Thai operator True Corp and enter a strategic partnership with the company.
The planned share purchase will make China Mobile – the world's largest mobile operator by subscribers - True's second biggest shareholder after Chaoren Pokphand Group.
Following the transaction, which requires regulatory approval, True also plans to raise 36.43 billion baht ($1.12 billion) via a rights issue.
The two operators will then co-operate on areas including technology and network construction, procurement sharing and new business opportunities.
China Mobile has been actively pursuing international expansion, and considers Thailand to be a good contender due to its proximity to China and the nation's large ethnic Chinese population, the company said in a statement.
“True Group is a good partner in Thailand as evidenced by its leadership in the broadband and cable TV industry as well as its position in the 3G and 4G mobile business,” China Mobile CEO Li Yue commented.
“Thailand and China enjoy strong economic and trade connections, homogeneous languages, habits and cultures, and the investment environment in Thailand is very friendly.”
He said the collaboration is expected to give China Mobile access to new customers, international business opportunities and new earnings growth drivers.
True Corp needs to raise funds in light of the upcoming 4G license auctions and to help reduce its debt burden.