TMB Bank and ING Corporate Finance Asia have announced a partnership to provide a full range of services to Thai companies seeking to expand across borders through merger and acquisitions.
The announcement was made at a seminar held recently in Bangkok for about 70 TMB customers under the title “Hunting Ground Beyond the Comfort Zone: Cross-Border M&A”.
The partnership would help companies across a broad range of industry sectors to expand in neighbouring countries, including Cambodia, Laos, Myanmar and Vietnam, a sub-region often referred to as CLMV, as well as in other parts of Asia and the world depending on the companies’ strategies and capabilities.
“Many very large Thai corporates have already made acquisitions overseas. but we are aiming this new service at TMB’s mid-sized customers, listed on the exchange or not, who have the capability and the interest to go overseas and are looking for the right opportunities,” said Senathip Sripaipan, chief wholesale banking officer at TMB.
“These are companies with annual sales of up to Bt10 billion. For companies making consumer goods, the CLMV region is quite interesting because it’s close to home, its markets offer similarities to Thailand, logistics costs are affordable, and they enjoy a higher economic growth rate.”
Data collected by the Stock Exchange of Thailand shows that listed Thai companies are seeing a growing share of their revenues coming from overseas operations. At the end of 2016, 198 firms, representing 39 per cent of all SET-listed companies, were invested abroad, 116 of them in the CLMV countries. In 2017, the CLMV countries are forecast to enjoy average GDP growth of around 7 per cent, compared to the 3.5 per cent growth forecast for Thailand.
“What we have seen over the last five years is increasingly Asian counterparts to mergers and acquisitions representing a growing number of international transactions,” said Michael Niederberger, managing director, head of corporate finance Asia at ING. “What we are seeing increasingly from Asian acquirers is that they are looking for technology investments, in IP, R&D, skills and services. that cater to the greater demand for the rising income levels.”
ING Corporate Finance Asia has a team of 20 bankers offering M&A advisory services to clients in the region.
A recent example of cross-border M&A by a Thai company is that of AAPICO Hitech Pcl, a car parts manufacturer, which this year invested around 3.5 billion baht to acquire a 25 per cent stake in Sakthi Global Auto Holdings Ltd, a global car parts supplier. Sakthi has operations in India, Europe, and China, as well as research and development facilities in the United States, which AAPICO would be able to tap through this deal. TMB’s investment banking department helped AAPICO complete the transaction by providing credit facilities and advisory services.
TMB Bank Pcl has been operating since 1957. ING Bank NV has been a major shareholder in TMB since 2007