THAILAND Trends and Developments Contributed by: Nuchaya Timrat, Naris Asavathongkul, Sirapop Amorncheewanun and Tunn Junhasavasdikul, Baker McKenzie
proven solutions into mission-critical industries. Thai- land’s regional leadership in the food and beverage, logistics and many other industries has positioned these sectors as active arenas for M&A activity, with buyers seeking greater AI and robust infrastructure capabilities that can be deployed, commercialised and integrated into existing workflows (so-called “capability deals”). The most prominent example of this is LINEMAN Wongnai’s spree of bolt-on acquisitions, having recently announced its acquisition of JERA Cloud, a vertical SaaS offering cloud and POS solutions in the wellness and clinic industry. Humanica’s acquisition of Cadena Group, a Singapore-based provider of human resource information systems, and Lawson Software, a Thai enterprise software provider focused on payroll and business management solutions, exemplifies the growing trend of capability deals. Thailand’s position as a regional hub for traditional industries (including food and beverage, logistics and manufacturing) and the drive for digital transformation should continue attracting M&A and industry-specific solutions. The shift to a technology outsourcing model One factor that the authors expect will help to drive greater tech M&A activity in Thailand in the coming years is the outsourcing trend of multinational and leading local companies, particularly in specialised sectors such as healthcare and biotech, in which large, specialised companies opt to delegate non- core functions to external partners or assets through acquisitions or joint ventures. Thailand is an estab- lished regional leader in healthcare in South-East Asia. However, given that healthcare sales channels – ie, the ways in which a healthcare provider reaches its patient or customer – are severely fragmented, large pharmaceuticals or consumer health companies are scarcely able to justify investments in Thailand without a thorough and omni-channel approach to reach Thai consumers. Ultimately, this serves as a quicker and cheaper route to market than greenfield investments and building out local presences. In Thailand, the authors see this shift as being par- ticularly relevant given the country’s relatively strong healthcare infrastructure. By outsourcing distribution, service delivery and even R&D, global firms can tap
into local capabilities while focusing internal resourc- es on a broader global strategy. This model benefits players such as Eppendorf Thailand, a local market leader for laboratory equipment recently acquired by DKSH Technology, allowing DKSH to leverage Thai- land’s robust healthcare infrastructure while bypass- ing the complexities and costs associated with build- ing a local operation from the ground up. The authors expect that Thailand’s position as a regional medical hub will serve as a springboard allowing for the out- sourcing trend with M&A activity in health tech to pick up within the next few years. Outright acquisitions of media assets and sports streaming deals In the media and entertainment sector, two distinct trends have been driving M&A activity, with the rise of digital streaming technology being a key factor. In today’s streaming-driven entertainment landscape, owning a large library of content – such as music, films and TV shows – has become key to generating strong revenue and profits. As a result, digital stream- ing platforms, music and movie distributors, major pri- vate equity funds and large entertainment companies are all competing to acquire more content assets. First, today, steaming service providers and other buyers are more motivated than ever to acquire or secure premium media assets. Their goal is to attract and retain subscribers by offering high-value content due to the fiercely competitive streaming market, and the “serial churner” phenomenon (in which users subscribe to a streaming service for the purpose of accessing specific content and then subsequently cancel their subscriptions) has long troubled stream- ing services. The industry is thus pivoting its focus to retention strategies that give streaming services greater control over their content offerings in a bid to deliver the right content to the right consumer. One of these strategies is to own the content machine. This allows streaming services to leverage established IP to fit the needs of consumers, without relying on the terms and conditions of the underlying right-holders. ESPN’s acquisition of the National Football League’s (NFL) media assets is a prime example of using media assets that are inherently “seasonal” to generate and monetise year-round content. Thailand is also seeing
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