Director-general Siripol Yodmuangcharoen said the department was amending some regulations to ensure fair practice in the current tougher trade-competition environment.

The amendments will focus on revising outdated merger practices. For instance, old regulations allowed a company with a one-fourth market share or at least Bt5 billion in total sales to merge with another. After the merger, the company's market share could not exceed one-third with total sales of at least Bt5 billion.

A department committee is studying merger and acquisition laws in countries like Australia, the United States and Taiwan as a model for Thai regulations, which he said was also aimed at ensuring that multinational companies conform to international rules.

The business-merger regulations will form an important addition to competition laws. However, they were drafted two years ago and approved by the ousted Cabinet as part of market-dominance regulations.

Siripol said the department would soon wrap up its revision and then propose that Commerce Minister Krirk-krai Jirapaet forward them for Cabinet approval.

In accordance with Article 25, which covers unfair market monopolies, the department will consider several factors when allowing business mergers. For instance, the market share of a business in a given segment, total sales revenues and concentration ratio based on business size.

The merging companies should not have a total concentration ratio of more than 75 per cent. Siripol explained that a company with a total concentration ratio above 75 per cent would generally not be allowed to merge with another company, because it would then monopolise the market. However, the decision would ultimately depend on a ministry committee, since some business mergers might benefit the country.

Petchanet Pratruangkrai

The Nation