Lotus's is a retail chain in Thailand operated by Charoen Pokphand Group, with operations in Malaysia through acquisition of Tesco operations in Malaysia since 2020. BANGKOK -- British supermarket chain Tesco has agreed to a $10.6 billion deal to sell all its stores in Thailand and Malaysia to companies belonging to the CP Group, Thailand's biggest conglomerate. The CP Group completed the transaction a cash and debt-free basis, split amongst its various subsidiaries, including C.P. That means shared prosperity is not increasing,” she elucidated. // ]]>. On 9 March 2020, CP Group submitted the winning bid to purchase Thai retailer, Tesco Lotus, for about US$10.6 billion. “I think their ruling will also have implications for foreign investors interested in Thailand in terms of the perceived strength of the competition law, especially in the service sector.”. CP is controlled by the Chearavanont family, which Forbes magazine lists as Thailand's richest outside of the country's royal family. OTCC will need to hone its arguments, which ever way it rules. “CP has the biggest share of the retail market, but they have divided it up between convenience stores, cash and carry and hyper markets,” said Chatrchai. Proposed sale of Tesco’s businesses in Thailand and Malaysia to a combination of CP Group entities, namely C.P. 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After doing or accomplishing little during its first 17 years of existence, the OTCC got a significant power injection with the passing of the Trade Competition Act in 2017, which boosted the body’s budget and clout. The Tesco deal will also give the CP Group 214 Tesco hypermarkets, 179 Talad Lotus (mini marts) and leased space in 191 malls in Thailand, along with 46 Tesco hypermarkets, 13 supermarkets and nine convenience stores in Malaysia. Previously known as Tesco Stores (Malaysia) Sdn Bhd, the company sold its businesses in Thailand and Malaysia to Thailand’s CP Group entities. At present, however, Central Group has no presence in the hyper-market sector. “If you have high market concentrations, the incentives to innovate and to take part in price competition is low,” said Birgit Hansl, World Bank country manager for Thailand. Last week, Tesco announced that it was selling 86.9% of the Thai business and 100% of the Malaysian business to CP Group for an enterprise value (EV) of US$10.6 billion (RM45.2 billion). Diversified Communications | 121 Free Street, Portland, ME 04101 | +1 207-842-5500. [CDATA[ Merchandising Co., a wholly owned subsidiary of CP Foods. BANGKOK — British supermarket chain Tesco has agreed to a $10.6 billion deal to sell all its stores in Thailand and Malaysia to companies belonging to the CP Group… While Prime Minister Prayut Chan-ocha’s two administrations – one coup installed, the other elected – have professed to prioritize creating a more equitable society, their alliance with top conglomerates under the state’s “pracharat” development scheme has drawn skepticism. The Central Group, with its profit from the Big C sale, bought Big C’s chain in Vietnam. “If TCC had won it they would have had a real monopoly over the hyper-market segment, but with the CP deal it is not clear that it is a monopoly,” said Chatrchai Tuongratanaphan, former executive director of the Thai Retailers Association. The CP Group’s US$10.6 billion acquisition has yet to be finalized as it must first be approved by Tesco’s shareholders and by Thailand’s Office of Trade of Trade Competition Commission (OTCC), a process that could take up to 90 days. The Malaysia Trade Competition Commission (MTCC) approved Charoen Pokphand’s (CP) acquisition of Tesco Lotus in Malaysia in November 2020. There are still many so-called “mom & pop” stores, especially in the countryside, though they are fast disappearing in Bangkok. All rights reserved. The proposed acquisition promises to be a test case for Thailand’s revamped OTCC, an independent body set up in 1999 to curb the growth of local monopolies and unfair business practices. British supermarket chain Tesco has agreed to a $10.6 billion deal to sell all its stores in Thailand and Malaysia to companies belonging to the CP Group, Thailand's biggest conglomerate. Merchandising Co., Ltd (“CP Group”) (the "Disposal"), following inbound interest received and a detailed strategic review “The CP-Tesco deal has put the OTCC in the spotlight,” said Pavida Pananond, associate professor at Thammasat University’s Business School in Bangkok. TCC currently owns the Big C hyper-market store chain, bought from France’s Casino Guichard Perrachon and the Central Group in 2016, and is currently Tesco-Lotus’ main rival in the hyper-market segment. The chain now boasts more than 11,000 outlets nationwide, growing at a rate of about 700 stores a year since 2013, when it had only 7,412 outlets. In the late 1980s, CP deliberately moved into retail and telecommunications, which the group’s chairman and founder Dhanin Chearavanont, 80, presciently saw as rapid growth areas for Thailand’s then accelerating economy and rapidly growing middle class. Tesco Malaysia Sold For RM2.95 Billion To Thai Company CP Group. FILE - In this Dec. 14, 2001, file photo, the logo of the Tesco Lotus superstore Bangkok branch, Thailand. “This joint investment will boost sales of both Tesco and CPF. If the Tesco deal goes through, the CP Group will add 1,574 Tesco Express stores to its network, controlling 12,500 of the estimated 16,000 brand name convenience stores nationwide. The CP Group owns about 46% of the 7-Eleven stores and franchises the rest out to private players. The OTCC will have its work cut out for it. Thai conglomerate's $10.6 billion bid for UK retailer's Thailand and Malaysia outlets may be rolled back on anti-competitive grounds. The three families rank among Thailand’s wealthiest, collectively worth more than US$65 billion. Tesco Lotus stores currently operate in five formats by Syahrul. The purchase was made at a 12.5x multiple of enterprise value per earnings before interest, tax, depreciation, and amortization (EBITDA), the group said, and the deal is expected to close by the second half of 2020. As of now, it is still unsure if the Tesco’s products will still remain in the stores. Additionally, the company will return approximately GBP 5 billion (USD 6.6 billion, EUR 5.7 billion) to its shareholders via a special dividend, Lewis said. // ]]>//