If you want to start an M&A transaction in Thailand, it is important to know that a prerequisite for such transactions is obtaining the approval of the local regulator. If the notification is not drawn up in accordance with all the rules and is not sent on time, then the parties to the transaction risk not only being fined, but even endangering the completion of the merger in Thailand. To prevent this from happening, check out our blog post information.
A merger in Thailand: filing formalities
If the consent of the regulator has not been obtained prior to the completion of the transaction, the consequences are as follows:
- a fine of no more than 0.5% of the total transaction amount;
- civil action.
If you plan to initiate a company merger in Thailand, please note that the director or anyone responsible for enforcing the merger control regulations is also subject to administrative sanctions.
The transaction will be at risk of termination if sufficient evidence has been found the person in charge is in breach of the pre-merger registration requirement.
A merger agreement must be provided to the regulating authority. It must necessarily contain provisions on the procedure and timing of the joint general meeting of participants, as well as changes that are made to the company to which the merger is carried out.
Changes to the charter may be required, in particular, to increase the authorized capital, if the Thai company does not have shares on its balance sheet for which the shares of the participants of the acquired company can be exchanged. If a joint meeting will not be held, then this is indicated in the contract.
The notice sent to the regulator must be supported with copies of documents provided to the Department of Commerce, and in the case of purchasing shares through a tender offer in Thailand - documents provided to the Securities Commission.
Notice has to be submitted to the regulator within seven days after the completion of the merger deal in Thailand. Otherwise, all parties to the deal will be fined. The amount of the fine is approximately 6,500 USD.
The regulator can consider your application for a long time - within 3 months from the date of its submission. If you have any difficulties and you need additional information on your application, then you will have to wait at least 15 days. However, compared to many other jurisdictions, the processing time for an application for a merger in Thailand is not that long.
NOTE: All information must be in paper format translated into Thai.
Reorganization as a way of shutting down organizations has become widespread in the Thai business environment. Company reorganization entails the creation of new legal entities or a change in the organizational and legal form of existing enterprises. As a rule, a reorganization always has reasons and goals.
In some cases, it is carried out on a voluntary basis, at the request of the legal entity itself, by the decision of the founders. And in this case, the reorganization is carried out in any of the listed forms. Sometimes, it is aimed at limiting the monopolistic activities of a company.
The merger of Thai companies is carried out only with the permission of the local regulator. In the event of false data on a transaction, businesses and their authorized persons may be subject to fines and even criminal prosecution.
Consulting on the M&A regulation in Thailand with our experts will familiarize you in detail with the basic rules for concluding merger agreements of local companies.