The Chirathivat family, who own Central Retail Corporation (CRC), Thailand's largest retail conglomerate, yesterday announced a merger with OfficeMate, a giant Thai online stationery and office-equipment company, to expand its online business in the King
Under the merger, which will result in an increase of registered capital in OfficeMate from Bt80 million to Bt320 million, the Chirathivat family will hold 75 per cent of the company, with the rest owned by OfficeMate’s existing shareholders, including the Ounjai family, the founders of OfficeMate.
The merger will be conducted by way of a share swap between members of the Chirathivat family and existing shareholders at a ratio of 3:1.
As part of the transaction, OfficeMate will issue 240 million new common shares to the Chirathivat family.
The two partners will consolidate their business units relating to office supplies, books and stationery, and online shopping, including OfficeMate, Office Depot – operated by Office Club (Thai) – B2S, and Trendy Day, to be under OfficeMate.
The merger is expected to be completed by the end of this year. OfficeMate itself will move from listing in the Market for Alternative Investment to the main board of the Stock Exchange of Thailand.
Tos Chirathivat, CRC chief executive officer, said combining Office Depot and B2S with OfficeMate, a
leading online retailer, would help the group increase its sales channels and offer more product variety to customers.
“Online retail will be a future business, which will happen very soon. There are many retail players wanting to enter this business strategically. However, there are still no dominant players in the business,” he said.
OfficeMate is a leader and specialist in online business, catalogue sales, and call systems, especially for office supplies and stationery products, he said.
“CRC has a strong retail network and huge merchandise [offerings] and can encourage the online business of OfficeMate further. This strategic alliance will strengthen CRC’s forefront position in the modern retail industry in Thailand and beyond.”
He added that CRC would add other product categories to the online retail business, such as electrical appliances, which have been handled by its PowerBuy business unit.
The online and catalogue sale services would be applied to CRC’s convenience-store chain Family Mart, recently acquired by the group. Family Mart itself currently has more than 1,000 branches in Thailand.
For 2012, B2S’ and Office Depot’s estimated assets are projected to be Bt3.4 billion with estimated total sales of more than Bt6.7 billion. After the merger, OfficeMate will have total assets of Bt4 billion and about Bt8 billion in annual sales.
Worawoot Ounjai, chairman and CEO of OfficeMate, said the merger would help move the online business of Central Retail beyond Thailand into regional and global markets. OfficeMate itself wants to provide next-day delivery service within the next two years.
He said OfficeMate expected to increase the contribution from online business from about 15 per cent now to between 35 and 40 per cent in the next three to five years.
Thailand’s business-to-consumer online retail business is estimated to be worth about Bt80 billion in total, quite small compared with the country’s gross domestic product of about Bt10 trillion.
In another development, CRC a couple of months acquired a building in Rome for Bt8 billion. Occupying total retail space of about 17,000 square metres, the building will be refurbished as its 12th La Rinascente Department Store. The renovation will take about three years.
Tos said the group’s retail business in Italy grew by about 17 per cent year on year in the past two months, a surge from the previous year-on-year growth of only 6 per cent.