Mega financial services deals dominate Thai market in 2019

Bangkok, Thailand. Photo: Jakob Owens/unsplash

The deal landscape in Thailand during 2019 was dominated by outsized IPOs, mega cross-border acquisitions, and significant venture capital deals. Here is a quick run-through of the top developments that grabbed headlines.

Financial services segment tops M&A activity

In the first major overseas acquisition for a Thai bank, Bangkok Bank Pcl purchased an 89.1 per cent stake in Indonesia’s PT Bank Permata for about $2.7 billion from Standard Chartered and PT Astra International.     

The announcement in December ended months of speculation and signalled a shift in strategy for Bangkok Bank, the country’s second-largest lender by assets. After the announcement, shares in the bank fell to its lowest level since 2016. The stock is about 18 per cent down this year.

Meanwhile, the country’s biggest lender, Siam Commercial Bank Pcl, announced the sale of its life assurance business to Hong Kong-based insurer FWD Group for $3.1 billion. The transaction is the largest insurance merger and acquisition deal in Southeast Asia. 

Within the domestic market, Thailand’s TMB Bank, Thanachart Capital and Scotia Netherlands Holding approved the $4.6-billion merger of TMB Bank and Thanachart Bank. The deal creates the sixth-largest bank in the country.

In other cross-border deals in the financial services space, Eastspring Investments, the Singapore-based investment management arm of global insurer Prudential, acquired a majority stake in Thanachart Fund Management Co Ltd (TFUND) for $137.6 million. 

Meanwhile, German insurer and asset manager Allianz SE completed the acquisition of a 19.21 per cent stake in Thailand’s Sri Ayudhya Capital (AYUD) to become its largest shareholder.    

Private equity firm Olympus Capital Asia led a consortium to acquire a 25 per cent stake in Thai Credit Retail Bank from Polaris Capital, an affiliate of Singapore-based PE firm Northstar Group, for $91 million.

In other sectors, agro-industrial and food conglomerate Charoen Pokphand Foods said it will acquire Canadian pork producer HyLife Investments Ltd for $372.7 million. And Siam Cement Group acquired a 55 per cent stake in Indonesia-listed paper packaging firm PT Fajar Surya Wisesa Tbk (Fajar) for $665 million.

New funds hit the market

Thai private equity firm Lakeshore Capital is in the market to raise $125 million for its second fund. The new growth capital fund will primarily back companies in Thailand, with the potential to invest up to 20 per cent of its corpus in Cambodia, Myanmar, Vietnam and Laos.

The investment firm had raised $60.7 million for its first vehicle that was closed in 2015. Lakeshore Capital is also said to have offloaded its entire stake in local steakhouse chain Santa Fe to Singha Corporation for $50 million, generating a 2.75x return.

Bualuang Ventures, an investment firm backed by Bangkok Bank, is targeting to raise $60-80 million for its second fund next year. Bualuang Ventures currently manages a $60 million fund, of which it has deployed $42 million in direct investments, including in private equity and VC deals, and capital allocation to venture capital funds. It has invested in venture capital funds managed by New York-based Credit Suisse NEXT Investors and Southeast Asian VC firm Jungle Ventures. 

Beacon Venture Capital, the corporate venture capital arm of Thailand’s Kasikornbank, announced its investment in the third VC fund of US fintech investor NYCA Partners, which was closed recently at $210 million. NYCA Investment Fund III also counts Beacon’s fellow Thai CVC, Digital Ventures, as a backer.

KASIKORN Vision (KVision), an investment holding company of KASIKORNBANK, set aside a budget of $245 million to invest in tech startups in ASEAN, China, Japan and Korea that can help the bank expand regionally. KVision will prioritise investments in fintech and e-commerce startups.    

Bangkok-based seafood processor Thai Union Group has launched a venture fund with an initial commitment of $30 million to invest in food-tech startups. The CVC will focus on alternative protein, functional nutrition and value chain technology. 

Top VC deals in 2019

Indonesia-headquartered ride-hailing unicorn Gojek announced an undisclosed investment from Siam Commercial Bank (SCB), Thailand’s largest lender by assets, as part of its ongoing Series F funding round.

For SCB, the investment in Gojek was a strategic way to counter the rise of tech-enabled models that are disrupting traditional businesses. “We try to find a way to partner quickly and scale with startups. Even with the big platforms, if you cannot beat them, partner with them. So find more strategic partnerships that you can invest in and grow out of them,” SCB executive vice-president Tana Pothikamjorn told DealStreetAsia on the sidelines of the Bangkok Fintech Fair.

In other double-digit funding rounds featuring Thai startups, Southeast Asian payments platform 2C2P raised $52 million from IFC, Cento Ventures, and Arbor Ventures. 2C2P, which is headquartered in Singapore and Bangkok, has raised a total of $70 million to date. 

Thai e-commerce startup Pomelo raised $52 million in a Series C funding round from a bevy of investors including Central Group, Provident Growth Fund, InterVest Star SEA Growth Fund, Andre Hoffman, Toivo Annus, Lombard Private Equity, Ambient Sound Investments OU, and The Luxembourg Company Deverel. The announcement confirmed an earlier report by DealStreetAsia.

Thai insurtech startup Sunday raised $11 million in extension Series A funding round led by Quona Capital, bringing its total funding to $21 million. The startup had raised $10 million led by Vertex Ventures SEA and India earlier in February 2019.

aCommerce, a Bangkok-based startup that helps brands such as Samsung, L’Oreal and Unilever sell their products online across Southeast Asia, raised over $10 million from existing investors including KKR & Co.

Thai blockchain and digital payments startup Omise, backed by Golden Gate Ventures, raised funding from Japanese financial group Nomura Holdings.

Bumper year for IPOs

Thailand’s stock exchange recorded another strong year, with 27 initial public offerings that raised $3.3 billion in 2019, according to global consultancy EY. In the country’s biggest listing this year, Thai billionaire Charoen Sirivadhanabhakd’s hospitality and property firm Asset World Corp raised $1.57 billion to acquire assets, develop and renovate existing properties and repay debt.

Separately, Thai Beverage is reportedly planning a Singapore IPO of some of its regional beer assets in a float that could raise $2 billion to $3 billion next year.

Meanwhile, Central Group, one of Thailand’s biggest conglomerates, is targeting an initial public offering of its retail arm as soon as the first quarter of next year. Central Retail Corporation on Thursday announced plans of raising up to 81.1 billion baht ($2.7 billion) in an IPO, in what would be the country’s largest IPO.

Singapore Reporter/s

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).

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

  • 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. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

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).

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

  • 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. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.