The M&A market has been active in recent years. With respect to the government’s ‘Thailand 4.0 Economic Plan’, the Thai government has encouraged investments in projects relating to infrastructure and energy, as well as technology innovations via investment incentives and tax incentives.
The Eastern Economic Corridor (EEC), expected to be a new important hub for trade, investment, regional transportation and a strategic gateway for Asia, has been established to promote large-scale investments. The Thai government has launched a pilot project in three provinces of Thailand, namely Chachoengsao, Chonburi and Rayong. The ECC has implemented eight programmes for EEC regional development, including infrastructure development, targeted industries development and business hub and finance hub development. In addition, the Public-Private Partnership Act BE 2562 (2019) (PPPA) has been promulgated in order to facilitate and promote the joint investments between the public and private sectors. The ECC together with the PPPA will play an important role in promoting not only the economic growth of Thailand but also the M&A market in Thailand.
Weerawong, Chinnavat & Partners Ltd (also known as Weerawong C&P) was engaged by the State Enterprise Policy Office (SEPO) of the Ministry of Finance to assist in the drafting of the PPPA, including subordinate legislation, regulations and guidelines for public-private partnership (PPP) mechanisms and projects in Thailand.
We were also engaged by the EEC to advise on the drafting of law governing PPPs in the EEC area, subordinate regulations and the subsequent guidelines regarding the PPP mechanism and projects in the EEC area. These laws and regulations are the pilot laws for the PPP framework for Thailand, to be reflected in the main law governing all PPPs in Thailand, as well as the complete framework, beginning with the preparation and instigation of PPP projects by each government agency, all the way to the signing and completion of a PPP project. The PPP projects that we have been involved in include (i) the U-Tapao International Airport project (valued at 200 billion baht, (ii) the high-speed rail link for the three airports (Don Mueang, Suvarnabhumi and U-Tapao International Airports) connecting Bangkok to the EEC province with stations at important hubs in major cities along the Gulf of Thailand project (valued at 237 billion baht), and (iii) the Laem Chabang Deep Sea Port project (valued at 150 billion baht).
Recent major M&A deals are as follows.
In early 2019, Global Power Synergy Public Company Limited (GPSC) acquired a majority stake of shares in Glow Energy Public Company Limited from Engie Global Developments BV and the subsequent tender offer. The deal was valued at 139 billion baht. This was the largest acquisition in Thailand’s energy sector in 2018.
In early 2018, Grab, a Singapore-based technology company, acquired Uber’s assets and operations in Southeast Asia by integrating Uber’s ridesharing and food delivery business in this region into Grab’s existing multimodal transportation and fintech platform. This deal was the largest-ever of its kind in South East Asia.
Symphony Communications/TIME dotCom
In late 2017, TIME dotCom International Sdn Bhd, a wholly owned subsidiary of Time dotCom Berhad, acquired 46.84 per cent of the shares in Symphony Communications Public Company Limited (approximately 1.3 billion baht). The transaction was structured as a partial voluntary tender offer and a subsequent rights issue to arrive at the desired outcome because of the foreign shareholding limit under telecommunications law.
In late 2017, Internal Beverage Holdings (Singapore) Pte Limited, which is a subsidiary of Thai Beverage Public Company Limited (ThaiBev), one of Asia’s largest beverage producers, acquired 75 per cent of ownership interests in Myanmar Distillery Company Limited; Myanmar Supply Chain and Marketing Services Company Limited; and International Beverages Trading Company Limited (collectively, the MDC Group). The deal was valued at approximately 23 billion baht. The MDC Group is Myanmar’s leading manufacturer, marketer and distributor of distilled beverages, including Grand Royal, the country’s leading whisky, and other brands. The acquisition provides ThaiBev with access to expanding markets and distribution networks.
In late 2017, the QSR of Asia Co Ltd, a subsidiary of Thai Beverage Public Company Limited, acquired more than 240 existing and a number of developing KFC stores under development in Thailand from Yum Restaurants International (Thailand) Co Ltd. The deal was valued at approximately 11.3 billion baht.
In 2017, Vietnam Beverage Company Limited, an associated company of Thai Beverage Public Company Limited (ThaiBev) (SGX-ST) acquired 53.59 per cent of Saigon Beer Alcohol and Beverage Joint Stock Corporation (SABECO) from the Vietnam Ministry of Industry and Trade. Sabeco is a public corporation in the Socialist Republic of Vietnam. Shares are listed on the Ho Chi Minh City Stock Exchange. The deal was valued at approximately US$4.83 billion. This is the highest value privatisation in Vietnam and the highest value acquisition in Vietnam to date. The deal will enable the ThaiBev Group to expand in the region, increase product offerings, and provide access to an extensive distribution network (Deal of the Year, ASIAN-MENA COUNSEL, In-House Community, 2017).
Dusit Thani/CPN Joint Venture
In 2017, Dusit Thani Public Company Limited, one of Thailand’s foremost hotel and property development companies, participated in a joint venture with Central Pattana Public Company Limited for the development of a large-scale, mixed-use real estate project with an estimated value of 36.7 billion baht in the central business district of Bangkok. The project will build on the unique Thai heritage of Dusit Thani to create a modern iconic landmark consisting of a hotel, residences, retail, office and green space. Weerawong C&P also assisted in the negotiation to extend the lease agreement with the Crown Property Bureau for 30+30 years for an additional plot of 24 rai at the intersection of Silom Road and Rama 4.
In late 2017, Thai Alliance Co, Ltd, a subsidiary of SiS International Holdings Limited (SiS) (HKEX) made the pre-conditional voluntary tender offer to acquire a 47.3 per cent interest in SiS Distribution (Thailand) Public Company Limited, representing a maximum of 184.1 million shares at 7 baht per share, provided that, upon completion, SiS and its group must hold more than 51 per cent of the total voting rights shares of the company. Upon completion of the voluntary tender offer, SiS Distribution (Thailand) Public Company Limited, one of the leading distributors of IT products in Thailand, became a unit of SiS. The transaction was valued at 1.417 billion baht.
In 2016-2017, PTT Public Company Limited, Thailand’s largest energy firm, restructured by spinning off its oil marketing and retail business to PTT Oil and Retail Business Company Limited, including more than 1,400 service stations, representing 40 per cent of Thailand’s petrol station market. The deal involved the transfer of assets, undertakings, licences, intellectual property and contracts in more than 20 jurisdictions (approximately 121 billion baht).
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