According to Mr. Chongrak Rattanapian, KBank Executive Vice President, M&A deals are booming, with Thai companies acquiring businesses at home and abroad, and foreign firms buying Thai businesses.
As for outbound M&As, Asia Pacific is the top target region among Thai acquirers that wish to extend their business potential in overseas, due mainly to its location and culture that is similar to Thailand's; the region is also one of the world's most popular M&A destinations given its large, high-quality market. Moreover, Thailand's outbound M&As in ASEAN, home to 620 million consumers, have jumped rapidly from 0.15 percent of GDP during 2009-2011 to 1.3 percent, or 175 billion Baht, during 2012-2015 - a level close to that of developed nations like Singapore. The growth was outstanding during 2013 in particular.
Over the next three years, ASEAN economic growth is expected to average 4.6-4.9 percent, with strong growth momentum clustering in the CLMV group at an average expansion rate of 7 percent, while Thai economy is likely to register around 3.2-3.6 percent growth over the same period. In addition, CLMV consumers will see spending power in their urban areas jumping from 6.3 trillion Baht in 2013 to 8.05 trillion Baht in 2020, or an average annual growth rate of 4 percent, therefore maintaining this economic group as Thailand's major investment target. As for industries, Thai firms are eyeing consumer products, as well as service businesses, the areas which are expected to see the most M&A deals. Cross-border M&As by foreign businesses in the Thai market – perceived as the regional hub – are also expected to flourish as they wish to build a production base here to tap the AEC market.
Meanwhile, the domestic M&As conducted by Thai companies are focused mostly on the sectors of property, food and beverages, chemical products and healthcare. Bright prospects are expected for the property sector where growth will remain healthy, given urbanization, implementation of many infrastructure projects nationwide, and special economic zone development. The healthcare industry tends to soar as well, due mainly to increasingly health-conscious consumers.
To build presence in ASEAN, a fast-growing, large-sized market, major Thai firms with strong brands, established operations and high cash surplus are recommended to explore regional partnerships towards brand building across ASEAN, or to seek partners with solid regional brands. With this strategy, Mr. Chongrak added, Thai operators' business opportunities in ASEAN or other high-growth potential markets will increase significantly. With experts that fully grasp and stay up-to-date on the overall industrial situations, KBank stands ready to offer services and advice in M&A transactions, in both the domestic and international markets.