PTT Group’s Global Power Synergy has secured the approval to acquire a 69.11 per cent interest in Glow Energy, the Thai unit of French energy major Engie while Thanachart Bank and TMB Bank are in talks for a merger.
PTT’s $4b acquisition of Glow Energy approved
The Thai energy watchdog has approved the $4-billion takeover of Glow Energy Plc by state-owned PTT Group’s Global Power Synergy (GPSC), on the new condition that the deal would not result in an electricity monopoly in the country.
The Energy Regulatory Commission had rejected the acquisition proposal twice earlier. However, it has granted permission last week, given that Glow must sell Glow SPP1 to a third party before or at the same time as the merger between Glow and GPSC materialises.
Glow’s major shareholder, French power firm Engie, has entered into an agreement with GPSC for that amendment to the 69.11 per cent share sale, SET-listed Glow said in a filing.
“Any adjustment of GPSC’s tender price of Glow’s shares will be disclosed by GPSC to investors,” it added.
Glow SPP 1 provides 110 MW of electricity to the Electricity Generating Authority of Thailand under the Small Power Producer programme. The Glow demineralised water plant, starting commercial operation since 1999, is capable of producing a total of 120 cubic metres per hour of demineralised water.
The initial merger proposal had been submitted in June 2018, with estimation of the transaction amounting to $4 billion. It was then dismissed two times in October and December.
Glow said it recorded a net profit of 6.52 billion baht in the first nine months of 2018.
Thanachart Bank, TMB in talks for merger
The local finance ministry might also put fresh funding in TMB following the merger, to retain its 25.9 per cent stake, the Bangkok Post cited Prapas Kong-Ied, general director of the State Enterprise Policy Office (Sepo).
The finance ministry is currently the largest shareholder in TMB. The lender also counts Dutch bank ING as a significant shareholder with a 25 per cent interest. Meanwhile, Thanachart Capital has 51 per cent in Thanachart Bank, and Canada’s Bank of Nova Scotia owns the rest.
Thanachart Bank and TMB are sixth and seventh largest banks in terms of total assets in Thailand, home to around 2,000 banks. Thailand has been encouraging local bank consolidation in a bid to create strong banking institutions in competition with global banks. In April 2018, the cabinet approved policies on tax deduction and exemption for merged banks. Krung Thai Bank was also said to be keen on acquiring TMB.
The merger talks between TMB and Thanachart Bank is expected to conclude in January.