Tesco Thailand takeover gets regulatory nod
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Thailand’s competition regulator has given the nod for British retail giant Tesco to sell its supermarket businesses to the Charoen Pokphand Group, despite monopoly concerns.
The $10.6 billion sale to Thailand’s biggest conglomerate was first flagged in March and also covers Tesco’s operations in Malaysia.
“The majority of commissioners agreed that the merger of those businesses (could create) market dominance… but it’s not a monopoly,” Thailand’s Office of Trade Competition Commission said in a statement on Friday.
The regulator said CP Group is not allowed to pursue other retail merger deals during the next three years.
Thai Retailers and Wholesalers Association president Somchai Pornrattanacharoen, who was on the regulator’s vetting committee, last month publicly expressed concerns that the deal would grant CP Group a monopoly, according to local media.
It is a boomerang sale of sorts — Tesco has nearly 2,000 grocery stores across Thailand which it bought from CP Group during the Asian financial crisis in 1997-1998.
Questions & Answers
Q.What was the total value of Tesco's sale of its supermarket businesses?
What was the total value of Tesco's sale of its supermarket businesses?
The sale of Tesco's supermarket businesses to the Charoen Pokphand Group was valued at $10.6 billion. This significant transaction includes both Tesco's operations in Thailand and Malaysia.
Q.Which other country's Tesco operations are included in this sale to CP Group?
Which other country's Tesco operations are included in this sale to CP Group?
The sale of Tesco's supermarket businesses to CP Group also includes its operations in Malaysia. This expands the scope of the transaction beyond just the Thai market.
Q.What restriction has the regulator placed on the CP Group following this acquisition?
What restriction has the regulator placed on the CP Group following this acquisition?
The regulator has stipulated that CP Group is prohibited from pursuing any further retail merger deals for the next three years. This condition addresses potential concerns about market dominance after the Tesco acquisition.
Q.When did Tesco originally acquire these grocery stores from CP Group?
When did Tesco originally acquire these grocery stores from CP Group?
Tesco originally purchased nearly 2,000 grocery stores across Thailand from CP Group during the Asian financial crisis. This acquisition took place specifically in the period of 1997-1998.
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