Thailand CP Group’s take over bid for Tesco Asia
The 332.6 billion baht deal between the UK’s Tesco-branded Asian interests and Thai conglomerate CP Group, is coming under scrutiny as there are fears it could lead to a mega-retail monopoly. In the deal, the Chareon Pokphand Group will acquire all of Tesco Asia. CPAll and CPF informed the Stock Exchange of Thailand of their surprise investment in Tesco Asia yesterday.
Before the deal can be approved by the Trade Competition Commission, the chairperson of the anti-trust commission, Sakon Varanyuwatana, says that the impact of such a buy-out must be assessed.
“We are waiting for the parties involved to submit details of the deal , under which Chareon Pokphand Group will acquire all of Tesco Asia.”
“The commission had closely monitored reports on its progress but refrained from making comment as it could affect ongoing negotiations and the stock prices of both parties.”
The commission says they expect both Tesco and CP to provide full disclosure about the financial arrangements before they can expect to seek approval from the commission. CP All already operates 8,127 7-eleven stores across Thailand.
“It might amount to a market monopoly and power over other retail store chains if it also acquires the Tesco Lotus brand.”
Tesco announced yesterday the sale of its business in Thailand and Malaysia to CP Group in a deal valued around US$10.6 billion (332.6 billion baht).
A few details about the proposed deal indicate the Charoen Pokphand Group and Charoen Pokphand Holdings would acquire 40% of Tesco Asia’s business in the Thailand and Malaysia, its subsidiary CP All Public Company 40%, with Charoen Pokphan Foods Public Company holding the balance of 20% via its wholly-owned subsidiary CP Merchandising Company, according to The Nation.
SOURCE: The Nation
