M&A Guide 2025: Thailand

In 2024, M&A activity in Thailand demonstrated resilience despite ongoing economic challenges. Key sectors driving dealmaking include TMT, energy, financial services, healthcare, and real estate, with TMT and electric vehicle (EV) supply chains, including EV-related automotive parts, leading the way. While industries such as financial services and healthcare experienced slowdowns by the end of 2024 due to economic headwinds, optimism remains strong within the technology and media sectors.

Cross-border dealmaking continues to thrive as multinational companies capitalise on Thailand’s strategic location, improving infrastructure, and investment incentive schemes, particularly in the technology and EV sectors. The overall outlook for M&A transactions continues to grow positively as the market adapts to evolving economic conditions.

Thailand’s M&A landscape is influenced by both private and public transactions, with private deals being more prevalent due to their flexibility, accessibility for smaller transactions, and appeal to local and international investors. Private M&A is particularly active in high-growth sectors such as technology, music industries, EVs, and real estate.

Public M&A, on the other hand, is more prominent in established industries such as telecommunications and media, energy, financial services, and infrastructure, where large publicly listed companies pursue consolidation and restructuring strategies to maintain competitiveness.

While foreign investors remain active in Thailand’s M&A market, they often favour private deals to avoid regulatory complexities associated with publicly listed companies. This trend continues to fuel momentum in the private M&A space.

In 2024, several high-profile M&A transactions in Thailand significantly shaped the market landscape.

One prominent deal involved Universal Music Group (UMG), a global leader in music entertainment, which acquired the iconic back catalogue of RS Public Company Limited (RS) through a transfer of music assets to RS UMG Company Limited, followed by the first and second tranches of shares acquisition in RS UMG Company Limited.

This two-stage strategic acquisition spanned over two years and successfully granted UMG full control over RS’s back catalogue, comprising over 10,000 songs and related content, including music videos, lyrics, compositions, pictures, photographs, and licensed rights, spanning 1981 to 2022. The catalogue features work by more than 960 well-known artists. The acquisition was valued at over $65 million. This deal underscores the increasing number of acquisition transactions within the entertainment and media industry, and the growing value of intellectual property in M&A activity.

Another significant deal was BYD’s acquisition of a 20% stake in Rever Automotive, its local Thai distributor. While the deal’s value was not publicly disclosed, this investment highlights Thailand’s growing importance as a regional hub for EV production and distribution. The move aligns with BYD’s broader Southeast Asian strategy, particularly as it establishes its first regional manufacturing plant in Thailand. This transaction is expected to drive further foreign direct investment in the country’s EV supply chain.

The education sector also saw significant M&A activity, with a joint venture between Dymon Asia Private Equity and the Ourairat family. The transaction included the entire business transfer of Satit Bilingual School of Rangsit University and the British International School, Phuket, along with the acquisition of shares in Satit International Bilingual School of Rangsit University Chiangmai and SBS International Bangkok. These institutions are among Thailand’s most prestigious private schools.

These recent deals involving prominent brands in Thailand’s market have generated significant discussion among the public. They also illustrate key M&A trends, including cross-border expansion, industry consolidation, and the growing appeal of high-value intellectual property and education assets, likely influencing future dealmaking in Thailand. Completing these transactions required extensive legal analysis and a comprehensive understanding of the business landscape and local market dynamics, owing to their unique complexities, scale, and cross-border implications.

In 2024, Thailand’s M&A market demonstrated resilience despite fluctuations. While 2023 saw significant activity driven by the energy, food and beverage, logistics, and industrial sectors, 2024 marked a shift towards TMT, real estate, and healthcare, with a higher value per deal. The evolving focus reflects the market’s adaptation to global trends, with growing interest in technology-related businesses and diversification into sectors offering long-term growth opportunities.

M&A activity in Thailand is expected to be volatile in 2025, with a slight improvement from the previous year, mainly due to the anticipated challenging global economy.

While sectors such as manufacturing and energy will likely continue to attract investment due to various government initiatives, the broader market may see a shift in focus towards distressed asset acquisitions, particularly in real estate and hospitality, as economic pressures persist. Meanwhile, TMT-related sectors, including entertainment, are gaining momentum, especially with discussions around promoting entertainment complexes in Thailand.

Outbound investment trends remain centred on energy and natural resources. Joint ventures, venture capital investments, and strategic alliances will continue to offer flexible entry strategies with lower capital commitments. Investors worldwide – mainly from the US, China, and Japan – should remain key investors in Thailand.

Tax implications and foreign ownership restrictions play a significant role in shaping deal structures in Thailand. Fixed pricing remains traditional, particularly for large-scale transactions, to facilitate quicker deal closures and minimise post-completion adjustments. This pricing approach is especially appealing to Thai sellers, particularly in bidding or auction sales, which generally involve accelerated timelines. At the same time, Thai conglomerates and foreign investors are strategically diversifying their portfolios, expanding into real estate and construction, mega infrastructure projects, renewable energy, consumer and retail, and healthcare. This diversification mitigates investment risks and bolsters competitiveness in an increasingly dynamic economic environment.

Financial investors, including private equity firms, continue to play a significant role in shaping M&A transactions in Thailand.

In recent years, M&A documentation has increasingly aligned with international standards, incorporating key elements such as pricing structures, warranty and indemnity (W&I) provisions, liability limitations, and the use of W&I insurance.

Due diligence on Thai target companies is evolving, with a heightened emphasis on regulatory compliance, particularly concerning data privacy regulations. The Foreign Business Act, B.E. 2542 (1999) (FBA) remains a critical factor, as it generally limits foreign ownership to less than 50% across many business sectors, unless the foreign investors obtain a foreign business licence or certificate, or a special exemption applies. In response, foreign private equity investors and venture capitalists are adapting by acquiring minority stakes alongside existing owners, allowing them to navigate legal restrictions while fostering strategic partnerships and market growth.

Private M&A transactions in Thailand are primarily governed by the Civil and Commercial Code (CCC), as amended, with the Department of Business Development under the Ministry of Commerce (MOC) serving as the main regulatory authority.

For public M&A transactions, the principal legislation is the Public Limited Companies Act, B.E. 2535 (1992), as amended, with the MOC overseeing public companies. Additionally, for publicly listed companies on the Stock Exchange of Thailand (SET) or those that have issued securities to the public, the Securities and Exchange Act B.E. 2535 (1992), as amended (the SEC Act), is also applicable. These companies are further regulated by the Securities and Exchange Commission of Thailand (SEC) and the SET.

Merger control in Thailand falls under the Trade Competition Commission of Thailand, which enforces the Trade Competition Act B.E. 2560 (2017) (TCA) and its sub-regulations. The TCA governs M&A transactions that could lead to monopolies, market dominance, or significant reductions in market competition. However, it does not apply to industries regulated by sector-specific legislation, such as telecommunications, broadcasting, and energy.

There were no regulations enacted in 2024 that directly affect M&A transactions. The most recent amendment remains the revision to the CCC on February 7 2023, which introduced the merger scheme as an alternative to the existing amalgamation scheme.

Under the merger scheme, two or more companies merge into a single surviving entity (e.g., company A + company B = company A or company B). In contrast, the amalgamation scheme results in the formation of a new entity altogether (e.g., company A + company B = company C). This reform provides private companies with greater flexibility in structuring M&A transactions.

Additionally, in February 2024, the Thai Revenue Department clarified that the tax treatment applicable to an entire business transfer (EBT) also applies to the merger scheme, as it is considered equivalent to an EBT.

Two legislative amendments currently under consideration could significantly impact cross-border M&A transactions.

The first involves amendments to the TCA, with draft proposals submitted to the House of Representatives for consideration. The revised scheme is anticipated to significantly change the merger control regime in Thailand.

The second amendment concerns the FBA and proposes exemptions from foreign ownership restrictions for nine types of service businesses and two categories of derivatives brokerage. The proposed changes would relax foreign business licensing requirements for derivatives brokerages, software development, telecommunications services, intercompany services (such as HR, IT management, and debt guarantees), oil drilling, treasury centres (under foreign exchange control laws), and other service businesses regulated under securities, stock exchange, and derivatives laws.

The timeline for the enactment of the TCA and FBA amendments remains uncertain. However, parties involved in cross-border M&A transactions should monitor these developments closely, as they could significantly affect Thailand's regulatory compliance and investment strategies.

A persistent misconception involves the legality of nominee shareholder arrangements. While permissible in certain jurisdictions, Thai law prohibits Thai nationals from acting as nominee shareholders intending to circumvent foreign ownership restrictions under the FBA or the Land Code B.E. 2497 (1954). This misconception may arise from the existence of different share classes in Thai companies, leading some to believe that nominee structures are legally permissible and enforceable. However, these arrangements put in place to circumvent the foreign ownership restrictions violate Thai law and can result in severe penalties for any Thai and foreign parties involved.

When structuring an M&A transaction involving foreign entities, foreign ownership restrictions applicable in Thailand are often a key concern but are sometimes overlooked due to the misconception mentioned above.

Furthermore, while merger control requirements receive more attention from investors, certain unfamiliar or new investors sometimes overlook the requirement for merger control clearance, as the merger control regime has been fully enforced in Thailand for less than 10 years. Nevertheless, there have been an increasing number of rulings and precedents under the Thai merger control regime established by the TCA, and investors tend to be more familiar with the requirements.

Following the pandemic, the practice of conducting M&A transactions remotely – initially adopted out of necessity – has continued. The use of virtual data rooms for due diligence, remote closings, electronic exchange of signature pages, and board and shareholders' meetings conducted via electronic means have become standard in Thailand.

That said, while Thai law generally recognises electronic signatures, they are not yet widely adopted in commercial transactions. Thai authorities still require wet-ink signatures for official documents, and there is a lack of court rulings providing clear guidance on the enforceability of electronic signatures. However, there is a growing trend – particularly in cross-border transactions – towards using electronic signatures, especially when supported by trusted software that verifies the signer's identity through a secure system.

The key requirements for a tender offer for the shares of a public company listed on the SET are laid out in the takeover rules under the SEC Act. Under these rules, an acquirer must make a mandatory tender offer to purchase all the shares and equity-linked securities of the target company if it acquires a quantity that reaches or exceeds thresholds of 25%, 50%, or 75% of the total voting rights. This requirement also applies to indirect acquisitions through intermediaries or ultimate holding companies controlling the target, a principle known as the ‘chain principle rule’.

In addition to a mandatory tender offer, an acquirer that purchases shares without reaching the mandatory threshold may submit a voluntary tender offer to gain control of the target company. This allows the offeror to announce a tender offer for all, or a portion of, the shares while specifying the minimum percentage it wishes to acquire.

Another significant factor in public and private M&A transactions is the restrictions on foreign shareholdings under the FBA. Due to these restrictions, a foreign investor may opt for a partial tender offer for less than 50% of the target company shares, which requires approval from the target company’s shareholders’ meeting and the SEC, subject to conditions specified in relevant SEC notifications.

An unsolicited bid can be structured similarly to a non-hostile bid, either through a mandatory or voluntary tender offer. However, hostile takeovers are rare in Thailand, primarily due to the lack of minority squeeze-out mechanisms under Thai law.

While a mandatory tender offer must be unconditional, a voluntary tender offer may be subject to certain conditions. These typically include regulatory approvals, board or shareholder approval from the offeror’s side, and relevant third-party consents.

In recent years, following the full implementation of Thailand’s merger control regime and the rise in high-profile public M&A transactions, more attention has been paid to merger clearance in voluntary tender offers. Additionally, material adverse change (MAC) clauses may be included as conditions for share acquisitions.

Under the Thai public takeover rules, a tender offer may be withdrawn if:

• There is severe damage to the status or assets of the target company after the submission of the tender offer to the SEC and before the expiry of the tender offer period, provided that the damage is not caused by the offeror; or

• There is a material decrease in the value of the securities after the submission of the tender offer to the SEC and before the expiry of the tender offer period due to any frustrating action taken by the target company.

The right to withdraw the tender offer may be exercised only if such actions are stated in the tender documents and no objection is raised by the SEC.

Break fees are not commonly employed in public M&A transactions in Thailand. Rather, public M&A deals are typically protected by non-refundable deposits or exclusivity undertakings to safeguard offerors. When break fees are used, Thai courts award damages based on actual loss, meaning the quantum of the break fee can be adjusted at the court’s discretion.

The most frequently used consideration mechanisms in Thailand are fixed price and completion accounts. Although the use of locked-box mechanisms has increased in recent years, they remain less prevalent compared with other purchase price mechanisms. Earn-out mechanisms are occasionally used, particularly when founders or executives are required to remain with the company for several years post closing.

The use of W&I insurance has increased in cross-border M&A transactions, especially when private equity investors are involved. However, W&I insurance remains uncommon among Thai investors due to limited familiarity, high costs, product constraints, and coverage exclusions. Despite this, some Thai-listed companies are open to using W&I insurance in outbound M&A transactions.

Apart from MAC clauses, regulatory approvals, licences, and permits material to the target’s business are customarily required as conditions precedent to completion. In addition, merger control clearance is a key consideration at the deal structuring stage, as market participants become increasingly accustomed to regulatory requirements following the full implementation of Thailand’s merger control regime.

In cross-border M&A transactions, it is common practice to adopt foreign governing laws in share purchase agreements. Thai courts generally recognise and uphold a contractual choice of foreign law, particularly when one of the parties is a foreign entity or individual. Thai courts will not enforce the chosen law if it is contrary to public order or the good morals of Thais. Recognition of foreign governing law may be more easily achieved if a share purchase agreement governed by foreign law is enforced outside Thailand, such as through foreign arbitration or a foreign court.

In Thailand, the most common exit strategies are trade sales and IPOs, particularly in private equity transactions. Shareholders’ agreements frequently include provisions granting investors the right to initiate a trade sale or an IPO once the target business reaches a specified valuation.

Thailand's M&A market in 2025 is expected to be dynamic yet uncertain, with a modest recovery from the previous year amid ongoing global economic challenges. Government-backed initiatives will likely sustain investment in manufacturing and energy, while financial pressures may accelerate interest in distressed assets, particularly in real estate and hospitality. Meanwhile, the TMT sector, including entertainment and gambling, is gaining traction, driven in part by discussions on developing entertainment complexes in Thailand.

The expansion of EV supply chains, digital infrastructure, and AI-driven innovations is expected to drive dealmaking activity. As a result, joint ventures, bolt-on acquisitions, and strategic partnerships will play a crucial role in market expansion, with companies actively seeking investment opportunities, alliances, and financial backers.

Legal practice is also evolving, with AI-driven solutions increasingly integrated into due diligence, contract review, and legal document automation. Law firms are expected to further embrace technology to enhance efficiency and deliver more sophisticated advisory services, particularly in response to regulatory changes and evolving client needs.