Trend and factors of mergers and acquisitions of business in Thailand

Abstract

In today business, competition is intensive and competitors continuously improve themselves to compete in marketplace. Unfortunately, due to an occurring of economic recession throughout the world and the coming agreement of free trade, doing business nowadays canʼt avoid the effect of these changes. Management has to lead its organization in a survivable direction by adjustment its organization and inducement suitable strategies. Mergers and acquisitions (M&A) is now an attractive strategy and widely popular in Europe and United State of America. Although in Thailand nowadays M&A arenʼt widely popular but it is an interesting alternative in making decision to survive or gain advantages in Thailandʼs business. At the beginning of this thesis, the theory of mergers and acquisitions were studied and merging case study of two businesses in India (Tata Oil Mills Company and Hindustan Lever Limited) was shown to illustrate the process of merging company and motives of merging. The study of history of M&A deals from collected 671 cases of mergers and acquisitions during 1997 to the first quarter of 2002 was, then, studied. After that, other factors relating to mergers and acquisitions of business in Thailand were studied. Beginning with study of information using in making decision to do business in Thailand. Then law relating with mergers and acquisitions both in Thailand and other countries are studied. Thailandʼs key economic indicators are, then, considered. After that, past 5 years profitability performance of companies in Stock Exchange Market of Thailand are studied. From the analysis of reasons of mergers and acquisitions case study, the most attractive reasons behind these deals are the need to “make business growth” and “gain synergy”, respectively. When deeply consider these reasons, “operating synergy” and “expanding business” are the key internal factors. For external factors, the study of factors relating doing business in Thailand is found that Thailand is attractive to invest in due to many benefits given to investor. For the factor of law relating with M&A, it is found that many limited regulations were released and special benefit was giving to foreign investor so it can draw foreign investors to invest in Thailand more. The economic factor studied was found that climate for investment in Thailand is quite good. For the profitability performance of most companies in Stock Exchange Market of Thailand were quite good but in some group of companies experienced trouble in recent past five years. The M&A activity in Thailand in the future tend to increase due to many factors support it and manufacturing business in Thailand has to adjust and induce new strategy such as “Consolidate within a Geographic Area” to survive itself.