Thailand’s CP Group gets antitrust nod for $11b Tesco assets buy, with conditions

A Tesco store sign is displayed. Photo: Simone Hutsch/unsplash

Charoen Pokphand Group won the Thai antitrust agency’s approval for its $10.6 billion acquisition of British retailer Tesco Plc’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. 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 Pcl.

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.”

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 $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% 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.

Bloomberg

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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