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Competition commission to consider CP's Tesco acquisition today

Oct 29. 2020
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By The Nation

The Trade Competition Commission (TCC) will meet today to decide whether Charoen Pokphand (CP)’s acquisition of Tesco’s Thailand business could lead to a monopoly or unfair market dominance. CP already operates the 7-Eleven franchise in Thailand.

Also read: OTCC sets new criteria for businesses to be considered monopolies

CP, through its subsidiary CP Retail Development Co, is buying an 86.9 per cent stake in Tesco Stores Thailand and 100 per cent in Tesco Stores Malaysia.

TCC chairman Sakon Waranyuwattana said the deadline for the 90-day consideration is the end of October, but it could be extended by up to 15 days if any commissioner wanted to present additional details.

“Regardless of the outcome of the consideration, there will be people who agree and disagree. But the committee will be impartial in its judgement, not favouring anyone,” Sakon said.

Somchai Pornratanacharoen, president of the Thai Wholesale and Retailing Association, said the TCC had held public hearings where concerns were raised that the CP-Tesco deal would put mom-and-pop stores out of business.

"Personally, I believe the TCC will allow mergers and acquisitions since they cannot stop the operations of large-scale national businesses. But we have to look at how this merger will affect small shops and how we can all live together. The country's economy is deteriorating, purchasing power is falling and shoppers are moving online. Regardless of the TCC ruling, society must be given good reasons for this merger, "said Somchai.

CP informed the Stock Exchange of Thailand in March that it had acquired shares in Tesco Stores (Thailand) and Tesco Stores (Malaysia).

The share purchases, which allow CP to acquire assets worth Bt338.445 billion, must be approved by the TCC and the Malaysia’s Domestic Trade and Consumers Affairs Ministry, respectively.

Tesco’s business in Thailand consists of 214 hypermarkets, 179 Tesco-Lotus stores, 1,574 Tesco Express branches, and leasing space in 191 shopping centres.

Tesco’s Malaysia business consists of 46 hypermarkets, 13 supermarkets, 9 small shops, and space leasing in 56 shopping centres.

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