CP All looks overseas with deal

The Bt188.8-billion takeover of Siam Makro will allow CP All, a retail arm of Charoen Pokphand Group and the third-largest operator of 7-Eleven convenience stores in the world, to open a new chapter in expanding cash-and-carry centres worldwide, except in India. 

Korsak Chairasmisak, chief executive officer of CP All, said yesterday that coming with the deal, which took only 10 days to negotiate, was the right for CP All to open cash-and-carry wholesale centres under the Makro name anywhere in the world outside of India. However, the focus on expanding Makro stores will be in Asean countries, especially Laos and Vietnam, as well as China. The company will also cash in on Siam Makro’s strategic growth in the local hotel, restaurant and catering industry.

Securing Siam Makro is another stepping stone for the company towards the Asean Economic Community in 2015.

“We are entering the AEC era with a combined population of more than 600 million. We expect economic growth and civilisation to come into the region along with the AEC, which is in contrast to Europe and the US, which are facing a recession. 

“To cash in on the AEC, we will be able to open Makro centres in any market in Asean and beyond, such as China and Pakistan and the rest of the world,” he said.

Demand is strong for Thai products in many neighbouring markets including Laos, Cambodia, Vietnam and Myanmar, Korsak said. Siam Makro will open up those markets.

“For 7-Eleven, we have only a licence for the Kingdom. We plan to expand 7-Elevens from about 6,700 stores in the Kingdom to 10,000 within five to six years. However, Siam Makro will be our business arm in expanding cash-and-carry centres overseas,” he said. 

Any expansion and investment plan regarding the Siam Makro business will not be revealed until after the annual shareholders meeting on June 12, he said.

Of the total value of the takeover deal, 10 per cent will be financed CP All cash and the rest from loans from five or six banks, including Siam Commercial Bank. The acquisition of Siam Makro shares will be proposed to the shareholders for approval at the June 12 meeting.

According to CP All’s filing to the Stock Exchange of Thailand yesterday, its board of directors on Monday approved the company’s acquisition of shares, execution of a sale and purchase agreement, and tendering of an offer for all securities of Siam Makro.

The company will acquire shares of Siam Makro, Siam Makro Holding (Thailand) and OHT Company from SHV Nederland in the amount of 154,429,500 shares, at Bt787 per share, representing directly and indirectly approximately 64.35 per cent of the total issued and paid-up shares of Makro. 

The company executed the share-purchase deal yesterday with SHV. It will also make a tender offer for the remaining shares of Makro in the amount of 85,570,500 shares at Bt787 per share, according to the SET filing.