THURSDAY, March 28, 2024
nationthailand

CIMB Thai predicts boost in M&A activity in lead-up to AEC

CIMB Thai predicts boost in M&A activity in lead-up to AEC

CIMB THAI BANK expects a boost in mergers and acquisitions late next year shortly before the full realisation of the Asean Economic Community (AEC), while Thailand is overtaking Malaysia in the number of M&As in the region this year.

Speaking after a seminar on “Mergers and Acquisitions in Malaysia and Singapore” yesterday hosted by CIMB group, Sithichai Mahakun, an executive of CIMB Thai Bank, said he expected M&As would rise over the next year or so before the AEC takes shape in 2015.
“M&A deals will rise, particularly in the period close to the AEC, as everyone will speed up preparation for regional competition,” he said. 
After the AEC takes shape, businesses will expand and extend their bases, and then normal growth will follow, he said. 
Sithichai said that from January to July this year, Thailand was the busiest M&A market in Asean, with total deal value of US$14.7 billion (Bt460 billion). Malaysia’s deals amounted to $8.8 billion. The Philippines’ deals accounted for $7.6 billion and Singapore’s $6.7 billion.
“In Asean, M&A activities are high, as this region’s gross domestic product rises sharply. In the next 10-20 years, that could be compared with Europe.” 
Sithichai said that in the past several months Thailand had seen a relatively high number of M&A deals, particularly in the financial and banking sector with entries of banks from Malaysia and Japan. 
CIMB Thai Bank now has three deals in the works worth about Bt2 billion to Bt3 billion and they are expected to be complete before the end of the year. One concerns a food business with assets in Thailand and foreign buyers in an Asean country. Another is a factory with assets in Thailand and an owner in Europe. 
CIMB Thai is also helping one equity deal and assisting in launch of four property funds, possibly next month. 
Mah Kah Loon, head of corporate finance for Asean CIMB Group, said the rules in Singapore were clear, easy and fair for all and these would help support M&As. 
“Consumer, property and energy groups are expected to do M&As for business synergy, and this trend will happen across the world, not only for Thai companies,” he said.
However, he warned Thai companies looking for possible deals in Singapore to conduct due diligence with caution. 
There remain concerns over the US debt ceiling. Sithichai said the United States was expected to reach a satisfactory solution by today’s deadline but it needed close monitoring.
The worst case would be no solution to the problem, and that would greatly affect banks across the world, he said. “The United States may see a downgrade in its credit rating and that will affect financing costs and market volatility will be seen across the globe. But there is very small chance for this,” Sithichai said. 
 
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