Mergers and Acquisitions in Thailand

Business Services

What are mergers and acquisitions?

Mergers and Acquisitions in Thailand involve the combination of companies or the purchase of one by another, playing a significant role in business development and growth strategies. The M&A process involves several key stages, including initial agreement, due diligence, negotiation, agreement finalization, merger process, and legal consultation.

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Key things to consider

Key Stages in Mergers and Acquisitions in Thailand involve several critical steps. It typically begins with the negotiation and drafting of an initial agreement, such as a Memorandum of Understanding (MOU) or Letter of Intent (LOI), outlining the preliminary terms and confidentiality agreements. Following this, the buyer conducts due diligence, investigating the target company’s operations, assets, legal compliance, and financial status to assess any potential risks or liabilities. Subsequently, negotiations ensue to address concerns uncovered during due diligence, aiming to finalize the transaction terms. 

Once negotiations are concluded, the parties proceed to prepare and execute the final legal documents, such as Sales and Purchase Agreements (SPA), adhering to Thai legal procedures. Given the complexity of M&A transactions, seeking legal consultation from proficient Thai lawyers is advisable to ensure adherence to regulatory requirements and facilitate a smooth process.

Additional Information:

  1. Shareholders’ Approval: Each company holds a shareholders’ meeting to garner approval for the merger.
  2. Registration: Companies register the Special Resolution of merger within 14 days of approval.
  3. Public Announcement: Each company announces its intention to merge in local newspapers, inviting objections from shareholders within 60 days.
  4. Finalization: A joint shareholders’ meeting addresses details of the merged entity following the opposition period.

FAQ

What are the key steps involved in completing an Mergers and Acquisitions in Thailand?

Key steps in completing an Mergers and Acquisitions in Thailand include negotiation and execution of transaction documents, conducting due diligence, obtaining regulatory approvals, shareholder approvals (if applicable), and closing the transaction in accordance with legal requirements.

Yes, certain industries in Thailand are subject to foreign ownership restrictions under the Foreign Business Act. Foreign investors seeking to engage in M&A transactions in restricted sectors may require specific approvals or need to structure transactions to comply with legal requirements.

Mergers and Acquisitions in Thailand are subject to regulatory oversight from government bodies such as the Department of Business Development and the Securities and Exchange Commission. Compliance with laws such as the Civil and Commercial Code and the Foreign Business Act is essential. Regulatory approvals may be necessary depending on the nature and scope of the transaction.

Before delving into the scope of transactions governed by merger control regulations, it’s crucial to understand the criteria for identifying a merger under the TCA and Merger Control Rules. A merger encompasses statutory amalgamation, asset acquisition, and share acquisition, as defined by the TCA. Transactions involving asset or share acquisitions are subject to regulation under the Merger Control Rules if they confer control upon the acquiring entity, as delineated by specific criteria outlined in the Rules. Control is established under circumstances such as asset acquisitions exceeding 50% of the target entity’s operational assets, acquisition of more than 50% of voting shares in an unlisted company, or acquisition of shares, warrants, or convertible securities resulting in the acquirer holding 25% or more of voting rights in a listed company. Additionally, transactions aimed at internal restructuring or reorganization within the same corporate group, recognized as a “single economic entity,” are exempt from merger control regulations.

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