Thai tycoon adds to record debt pile with $6.6bn Siam Makro bid

City A.M. Reporter
THAILAND’S richest man is offering $6.6bn (£4.3bn) to buy cash-and-carry wholesaler Siam Makro from Dutch firm SHV Holdings, the biggest Asia-Pacific M&A deal announced this year, adding to his debt load to grab more of the buoyant Thai retail market.

The country’s biggest convenience store chain CP All, controlled by Dhanin Chearavanont, is gunning to push deeper into Thailand’s $80bn retail sector just two months after Dhanin completed a deal to buy a $9.4bn stake in Ping An Insurance Group of China from HSBC.

The more than $11bn in loans that Dhanin-backed entities alone have taken on this year is, for Thailand, the largest offshore borrowing amount ever recorded by Thomson Reuters-LPC data.

The latest deal, primarily funded by a $6bn loan, will combine the operators of Thailand’s biggest convenience stores and cash-and-carry businesses, giving CP All greater bargaining power in sourcing supplies and the muscle to expand in south east Asia.

Dhanin and SHV founded Siam Makro in 1988, and by 1997 Dhanin’s Charoen Pokpphand (CP) group was its biggest shareholder. The crash of the Thai baht in 1997 forced Dhanin to sell holdings including Siam Makro and Lotus Supercenter, which was acquired by retailer Tesco.

The offer values Siam Makro at 53 times historic price-to-earnings, making it the most expensive retail stock in the Asia-Pacific region. According to Thomson Reuters the deal brings the value of 2013 announced retail M&A worldwide to $25.6bn.