THAILAND Trends and Developments Contributed by: Tokuhiro Matsunaga and Siriwan Nopareporn, SCL Nishimura & Asahi Limited
(b) in other cases, the acquisition or obtaining of shares with voting rights, on any given day, resulting in an increase in the total voting rights held in another business operator to more than 50%. With regard to this last bullet point, where the acquiring party is an individual business operator, any acquisi - tions made by the acquiring party’s spouse are aggre - gated for purposes of evaluating relevant thresholds. Where the acquiring party is a legal entity, acquisitions made by individuals or legal entities that hold more than 30% of the total voting rights in the acquiring entity, along with acquisitions made by related busi - ness operators that possess policy influence or con - trolling power over the acquiring entity, are aggregated with those of the acquirer for evaluation purposes. It is also essential to clarify that the Commission currently interprets the “Securities and Exchange Act” to mean the Thai Securities and Exchange Act. Consequently, in the event of foreign-to-foreign mergers involving companies listed overseas, a merger is triggered when the acquiring entity obtains 50% or more of the total issued shares of the foreign listed company, rather than the 25% threshold referenced above. The Thai merger control framework is organised into two distinct regulatory phases: pre-merger approv - al and post-merger notification. This dual structure reflects a strategic effort to balance the prevention of anti-competitive practices with support for legiti - mate business consolidations. The applicable phase is determined based on a substantive evaluation of the market impact: specifically, whether the proposed merger is likely to create or strengthen a “dominant position” in a market (per the criteria below), or wheth - er it is merely a “merger that may significantly reduce competition in a market”. According to the TCA, a “merger that may significantly reduce competition in a market” is defined by a spe - cific quantitative threshold. When the combined sales turnover of an acquirer, target company or merging parties collectively meets or exceeds THB1 billion in a particular market in Thailand, and the transaction does not create a monopoly or lead to the emergence of a “dominant position”, it activates the requirement for post-merger notification. This threshold-based
approach is designed to capture only those transac - tions that possess the potential to materially influence competitive dynamics, thereby ensuring that regula - tory attention is appropriately directed toward mergers with substantial economic significance. The calculation of sales turnover is comprehensive, and encompasses not only the merging entities but also all subsidiaries that have policy or control - ling power relationships. This extensive definition is designed to prevent the circumvention of regulatory requirements through intricate corporate structures or indirect control mechanisms. It is also important to note that the Commission’s interpretation of the “markets relevant for merger fil - ings” is that any market in which the relevant party or parties’ revenue equals or exceeds THB1 billion will be taken into account, whether or not the market oth - erwise qualifies as a merging market. This broad inter - pretation has led to misunderstandings in connection with cross-border transactions, as entities may not be aware that a merger filing could be triggered even in situations that do not pertain to the intended busi - ness activities. Thus, when either the acquirer group or the target group generates revenue of THB1 billion or more in a particular market in Thailand, there is a stringent obligation to submit a post-merger notifica - tion within seven days after completion of the merger. This limited reporting timeframe emphasises the Com - mission’s dedication to prompt oversight. By contrast, when a merger involves an entity that possesses a “dominant position”, or is likely to acquire one as a result of the merger, the regulatory framework requires pre-merger approval. This approach reflects a more cautious perspective, which acknowledges the increased risks associated with market dominance. By enforcing a higher level of scrutiny prior to the approval of these mergers, the regulatory Commission seeks to prevent the consolidation of market power that could have an adverse effect on consumer wel - fare and impede competition. Overall, the Thai regu - latory framework utilises a sophisticated, risk-based method of merger regulation, which was meticulously designed to address varying levels of competitive threat.
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