You are here
Thai tycoon gets antitrust nod for US$11b Tesco assets buy
[BANGKOK] Charoen Pokphand Group won the Thai antitrust agency's approval for its US$10.6 billion acquisition of British retailer Tesco's local retail business with some conditions.
Billionaire Dhanin Chearavanont's CP Group is barred from other modern-retailing mergers for three years, excluding e-commerce, Thailand's Office of Trade Competition Commission said Friday, while clearing the deal announced almost eight months ago.
CP Group will gain control of a network of about 2,000 hypermarket and grocery stores across Thailand. The ruling didn't mention a smaller number of stores in Malaysia, which is part of the agreement with the British retailer.
The agency's approval marks the exit of Tesco's 22-year-presence in Thailand under the Tesco Lotus brand and cements CP Group's position as the nation's dominant retailer. Mr Dhanin, whose family ranked the world's 13th richest in a Bloomberg report, will be adding Tesco's supermarkets to his empire, which also includes one of the world's biggest 7-Eleven convenience-store networks and the domestic operations of cash-and-carry specialist Siam Makro.
The deal will result in "increased market power but not a monopoly," the agency said in a statement. "The deal may significantly lower competition but won't create major damage to economy nor consumers' benefits." Mr Dhanin is buying back a retailer that CP Group founded in 1994 and sold to Tesco four years later during the Asian financial crisis. In 2013, the Thai entrepreneur reclaimed his control of Siam Makro by paying US$6.6 billion to buy out a stake from SHV Holdings.
Other conditions set by the agency are: CP All and Ek-Chai Distribution System, the conglomerate's main retail business units, must increase the proportion of product sales from small- and medium-sized enterprises at 7-Eleven stores and all Tesco outlets by at least 10 per cent year-on-year for five years Merged entity is barred from sharing any trade secrets with manufacturers or distributors of goods or raw materials Ek-Chai must maintain contract terms and agreements with existing manufacturers and suppliers of products or raw materials for two years.
CP All and Ek-Chai must report business performance on a quarterly basis, or in a period specified by the commission for three years.