Dhanin Chearavanont's CP All, owner of Thailand's 7-Eleven chain, has offered to pay about US$6.6 billion for discount retailer Siam Makro in the biggest takeover announced in Asia this year.
CP All, controlled by Dhanin's Charoen Pokphand Group - which bought HSBC's US$9.4 billion stake in Ping An Insurance in February - agreed to pay 787 baht (HK$212) a share for the 64 per cent of Siam Makro owned by SHV, CP All said yesterday.
It will also make a tender offer to other shareholders at the same price, a 15 per cent premium to Siam Makro's share price of 682 baht before it was suspended from trading on Monday.
The deal is the largest on record for Thai firms, which have spent more than US$31 billion on acquisitions in the past year as the baht strengthened and after their cash holdings more than quadrupled in a decade. Dhanin alone accounts for half of that.
"Rising cash flow and the strong baht have given Thai companies some advantages," said Adithep Vanabriksha, the chief investment officer for Thailand at Aberdeen Asset Management. "We expect this trend to continue as acquisitions are a better way to utilise cash flow and take advantage of a strong currency."
The baht has appreciated 7.6 per cent, the best performance among Asia's currencies, in the past year.
Siam Makro operates 57 Makro stores and five Siam Frozen stores. Its profit rose 37 per cent to 3.56 billion baht last year.
"The price we paid is not expensive," said Korsak Chairasmisak, the chief executive of CP All.
He said the company would use Siam Makro to expand in Southeast Asia, starting with Vietnam and Laos.