Thailand’s CP All to buy majority stake in retail chain Siam Makro in $6.6 bn deal
23 Apr 2013
Thailand's CP All Pcl, the world's third-biggest operator of 7-Eleven convenience stores, controlled by the country's richest man, today offered to buy local discount retail chain Siam Makro Pcl for $6.6 billion, in Asia's biggest deal this year.
CP All, controlled by Thai billionaire Dhanin Chearavanont's Charoen Pokphand Group, agreed to pay 787 baht a share for the 64.35 per cent of Siam Makro owned by the Netherlands-based SHV Holdings NV, a 15-per cent premium to Siam Makro's share price of 682 baht before it was suspended from trading yesterday.
Chearavanont, who in February had acquired a $9.4-billion stake in China's Ping An Insurance from HSBC, will initially buy 64.35 per cent in Siam Makro and then make an offer for the remainder of the company.
The acquisition is the largest in Thailand so far, and tops the $5.5 billion purchase of PTT Aromatics & Refining by PTT Chemical in 2011 according to data compiled by Bloomberg.
Five banks, including HSBC, Siam Commercial, Standard Chartered, Sumitomo Mitsui Financial Group and UBS will be arrange the bridge financing for funding part of the acquisition while the rest will be through cash reserves.
Siam Makro operates 57 Makro stores and five Siam Frozen stores by the end of 2012. It opened five new Makro stores in 2012, helping to boost revenue by 15 percent to 112 billion baht last year, the company said on 27 February. The Bangkok-based company's profit rose 37 per cent to 3.56 billion baht in 2012.
SHV Holdings expanded its international Makro chain of cash and carry stores to Thailand in 1988 and named it Siam Makro. Charoen Pokphand was the largest shareholder with 47 per cent stake.
But due to the devaluation of the baht in 1997 that triggered a collapse of most of South East Asian economies, Charoen started diluting its stake in Siam Makro until it sold nearly all t just retaining 1 per cent.
Siam Makro operates 53 stores in Thailand, 9 in Bangkok and 44 in other provinces.
