Thai cash and carry chain Makro in $86m acquisitions, expands in SE Asia
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The Thai cash and carry operator said, in a regulatory filing, it will be buying 80 per cent each in these targeted companies, which are Indoguna (Singapore) Pte Ltd, Indoguna Dubai LLC and two Hong Kong-based firms Lordly Company Limited and Just Meat Company Limited.
Siam Makro said it would use its own capital and bank loans to facilitate the acquisitions.
The transactions are expected to “support Siam Food in expanding its business with respect to providing food services solutions to premium food supplies in Singapore, the United Arab Emirates and Hong Kong and in accelerating an expansion of the business to ASEAN countries,” the company stated.
The targeted firms are engaged in a business related to Siam Food and Siam Makro operation, which is importing, exporting and distributing raw and frozen premium food supplies including Halal products and sausage and salami processing.
In conjunction with the aim to expand in Asia, Siam Makro has also set up a $2 million joint venture in Cambodia, registered as Makro Cambodia Limited in September 2016, in which it holds 70 per cent equity.
Siam Makro had said earlier this year that it was looking at the possibility of investing 6 billion baht to open 20 stores domestically during the year, and 3 billion baht to expand elsewhere in Southeast Asia, possibly in Cambodia, Laos and Vietnam.
The cash and carry chain’s parent company, CP All – controlled by business conglomerate Charoen Pokphand Group, operates the 7Eleven retail outlets in Thailand. CP All is reportedly planning to bring down its major holding of 97 per cent in Siam Makro.
Questions & Answers
Q.Which specific companies are being acquired by Siam Makro's subsidiary, Siam Food Services?
Which specific companies are being acquired by Siam Makro's subsidiary, Siam Food Services?
Siam Food Services is acquiring Indoguna (Singapore) Pte Ltd, Indoguna Dubai LLC, and two Hong Kong-based firms, Lordly Company Limited and Just Meat Company Limited. They are buying an 80% stake in each of these four businesses.
Q.What is the primary purpose of these acquisitions for Siam Makro?
What is the primary purpose of these acquisitions for Siam Makro?
The acquisitions are intended to support Siam Food in expanding its food service solutions, particularly for premium food supplies in Singapore, the UAE, and Hong Kong. They also aim to accelerate expansion into other ASEAN countries.
Q.How is Siam Makro funding these acquisitions and its broader expansion plans?
How is Siam Makro funding these acquisitions and its broader expansion plans?
Siam Makro plans to use a combination of its own capital and bank loans to facilitate the acquisitions. It had also previously earmarked 3 billion baht for wider Southeast Asia expansion.
Q.What other expansion initiatives is Siam Makro undertaking beyond these acquisitions?
What other expansion initiatives is Siam Makro undertaking beyond these acquisitions?
Beyond these acquisitions, Siam Makro has also established a $2 million joint venture in Cambodia, Makro Cambodia Limited, where it holds 70% equity. It also plans domestic store openings.
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