Thailand remains a hub of growth and opportunity in South-East Asia. KPMG’s Deal Advisory experts talk about various aspects of Thailand’s M&A landscape and how to take advantage of those opportunities. Their perspectives and insights highlight the ongoing transformation shaping Thailand’s deals environment.
Ian Thornhill
Head of Deal Advisory
KPMG in Thailand
In your opinion, where are the main opportunities in the next 12 months for deals and investments in Thailand?
Ian: I think the next 12 months will be one of the most interesting and dynamic periods in recent years for Thailand’s deal environment.
On the one hand, we will see a strong M&A market for growth and expansion deals, which will attract local investors and multinationals looking to enter Thailand as a new market, along with private equity funds looking to deploy some of the substantial capital that they have already raised.
On the other hand, we must also acknowledge that globally there is a lot of economic uncertainty, and Thailand is not immune to these challenges. Along with the higher interest rate environment, we will see more businesses that struggle to repay or refinance their bonds and loans as they fall due.
This will lead to more companies becoming distressed, the need to raise funds to refinance and restructure the debts, and a need for turnaround.
So, we will see an interesting mix of deals from both strong companies and sectors which continue to be attractive and demand high valuations, but also distressed M&A leading to opportunities for asset managers, credit funds and special situations funds and also strategic investors looking to acquire businesses at discounted valuations.
We will see an interesting mix of deals from both strong companies and sectors continuing to demand high valuations, and also distressed M&A leading to opportunities for specialist funds and strategic investors seeking discounted valuations.
Boonyaporn Donnapee
Legal Partner and Legal M&A specialist
KPMG in Thailand
In your experience, what are some common challenges that dealmakers encounter in the Thai market, and what lessons have you learned from addressing these challenges?
Boonyaporn: Common challenges for dealmakers in the Thai market include misunderstanding market conditions, unclear regulatory issues, and specific party requirements.
To address these issues, market research and due diligence are crucial, covering legal, financial, tax, commercial, IT, and ESG aspects. Deal structuring, including entity selection, deal type, and other transactions are also vital.
The market research should include studies on regulatory landscape, competitor analysis, market and industry trends, and potential risks. From a legal perspective, issues should include licensing requirements, foreign investment restrictions, available incentives, process of repatriating funds, competition law, land zoning, and labor law.
Thorough due diligence should be conducted upon identifying targets, covering financial, tax, legal, commercial, IT, and ESG aspects to identify and assess the risks and make informed decisions on the investment. Deal structuring involves combining commercial, tax, and legal considerations from due diligence and negotiation with the counterparty.
Once the commercial terms of a deal are agreed, a set of legal documentation should be carefully prepared to address the results from due diligence, responsibilities of parties and other terms and conditions.
Lastly, ensuring a smooth closing involves proactive communication and collaboration among all parties and relevant stakeholders.
Thorough due diligence should be conducted upon identifying targets, covering financial, tax, legal, commercial, IT, and ESG aspects to identify and assess the risks and make informed decisions on the investment.
KPMG is unique, as its Deal Advisory team in Thailand includes a team of specialist M&A lawyers. Can you please describe some of the advantages of this arrangement?
Boonyaporn: At KPMG in Thailand, our approach to M&A transactions is truly holistic. We work closely as one team with our Deal Advisory and Tax specialists to offer fully integrated M&A services, going beyond traditional legal and accounting paradigms.
This collaboration fosters a thorough understanding of potential risks and opportunities, without creating silos between different advisors.
Internally, our team benefits from learning opportunities across disciplines, while externally, we differentiate ourselves as a “true one-stop service provider for M&A“.
For our firm’s clients, this means we can act as lead counsel throughout the entire M&A process, providing integrated due diligence, preparation of transaction documents, negotiation, closing, and post-closing services.
Our aim is for transactions to run smoothly and for our clients’ interests to be protected without the need to seek advice from various advisors.
At KPMG in Thailand, our approach to M&A transactions is truly holistic. We differentiate ourselves as a ‘true one-stop service provider for M&A’.
How have recent market trends and developments in Thailand influenced your approach to deal advisory services? Can you provide examples of how you have adapted strategies or recommendations to align with the evolving business landscape?
Ian: As we all know the modern world is so much more complex than ever before. There is so much more information, and also the pace of change is so much more rapid than it has ever been.
We have therefore had to reshape how we work with our clients and how we advise them on deals to adapt to this new environment.
The traditional approach of providing an accounting, financial and tax report is no longer enough. Our clients need more rounded and holistic advice in order to navigate the risks and opportunities of any deal.
So, we invested in broadening our Deal Advisory team to include data and analytics specialists, strategy experts, value creation and operational improvement specialists as well as experienced lawyers and ESG teams.
They all work together and complement our core financial expertise so that we can work alongside our clients to see the full picture of any deal.
We focus on not just risks but also opportunities and upsides; we bring all of our experience and advice to help our clients to make the best decision to meet their goals.
