Thai Billionaire Sarath Ratanavadi’s $20B Merger: Gulf Energy and Intouch
Thai billionaire Sarath Ratanavadi is making significant strides in reshaping Thailand’s business landscape by merging Gulf Energy Development with Intouch Holdings. This ambitious merger is set to create a powerhouse worth over $20 billion, combining the strengths of energy production and telecommunications. The restructuring aims to foster sustainable growth and enhance operational flexibility, positioning the new entity as a leader in the energy and digital sectors.
The Merger and Its Mechanics
The merger will see Gulf Energy, one of Thailand’s largest private electricity producers, and Intouch Holdings, which controls Advanced Info Service (AIS), Thailand’s second-largest mobile phone operator, join forces. Gulf Energy shareholders will receive 1.02974 shares of the new company for each share they hold, while Intouch shareholders will get 1.69335 shares for each share they own. This merger is expected to be completed by the second quarter of 2025.
The combined entity will have a simplified shareholding structure to increase efficiency and business flexibility. “This will help increase efficiency, which will enhance the flexibility of the business and potential for future business growth,” Gulf Energy stated. This move is anticipated to create a balanced business portfolio combining revenue and profit from the energy and digital sectors, enhancing resilience and fostering sustainable growth.
Strategic Restructuring and Expansion
Sarath’s vision for the merger goes beyond creating a large conglomerate. He aims to transform Gulf Energy from a power producer to a leading telecom, technology, and digital services player. “Gulf Energy has made obvious it would like to recreate its brand as the leading telecom, technology and digital player rather than power producer,” remarked Varorith Chirachon, the Head of Investment Research at SCB Asset Management.
The merged company plans to make several strategic moves to support this transformation. Gulf Energy, Intouch Holdings, and Singtel Strategic Investments will tender for a 36.2% stake in AIS at 216.30 baht per share despite AIS shares trading at 220 baht. This acquisition is expected to enhance Gulf’s footprint in the telecommunications market. Singtel, which currently owns significant stakes in Intouch and AIS, will see its holdings simplified, ultimately retaining a 9.1% stake in the new company.
Additionally, the restructuring plan includes a tender offer to acquire 58.9% of satellite operator Thaicom for 11 baht per share. This move aligns with the group’s strategy to expand its digital and satellite communication capabilities.
Future Prospects and Sustainable Growth
The merger is not just a consolidation of assets but a strategic realignment aimed at sustainable growth and technological advancement. Gulf Energy has already invested in digital infrastructure, partnering with Alphabet’s Google to build AI-powered cloud facilities in Thailand and planning to double its data centre capacity to 50 megawatts by March next year. The company has also ventured into cryptocurrency by launching a cryptocurrency exchange in Thailand through a partnership with Binance.
The merger is expected to benefit stakeholders. “The combined expertise will benefit both companies and all stakeholders, increasing the potential of the new company to be a leader in the energy and telecommunications business,” Sarath stated. This new entity is poised to leverage its diversified portfolio to maximize operational benefits and explore new growth opportunities in renewable energy, telecom, and digital services.
Conclusion
Sarath Ratanavadi’s strategic merger of Gulf Energy Development and Intouch Holdings represents a forward-thinking approach to business in the 21st century. By combining energy production with cutting-edge telecommunications and digital infrastructure, the new entity is set to become a formidable player in both sectors. This merger simplifies the shareholding structure, enhances operational efficiency, and aligns with global trends towards digital transformation and sustainable growth. As the merger progresses, all eyes will be on how this new $20 billion entity shapes the future of energy and telecom in Thailand and beyond.
