1) Is a merger control regulation in force?

Yes. Merger control regulation exists under Chapter 3 of the Trade Competition Act. Subordinate legislation in the form of Ministerial Regulations and Announcements have likewise been issued by the Trade Competition Commission (TCC) pursuant to the Trade Competition Act.

2) Which authorities enforce the merger control regulation?

The TCC enforces the Trade Competition Act, including its provisions on merger control regulation. In line with this, the TCC has issued subordinate legislation prescribing the procedure and criteria for transactions subject to merger control requirements. The TCC acts through the Office of Trade Competition Commission (OTCC), which is an independent agency established under the Trade Competition Act. 

3) Relevant regulations and guidelines with links:

Merger control regulation is contained in Chapter 3 of the Trade Competition Act. More detailed rules may be found in subordinate legislation issued by the TCC. 

Links to the relevant legislation, guidelines, and forms are listed below:

4) Does general competition regulation apply to mergers or ancillary restrictions?

The Trade Competition Act and subsequent subordinate legislation promulgated by the TCC are silent on the treatment of ancillary restrictions in relation to a merger. That being said, the TCC has broad discretionary authority to examine all aspects of an intended merger that are related to competition and, in line with this, the TCC may impose certain conditions when granting approval to a merger. These conditions may also relate to ancillary restrictions.  

5) May an authority order a split-up of a business irrespective of a merger?

No, the TCC does not have authority to break up an existing business under the Trade Competition Act. The TCC may, however, order a business operator to suspend, cease, correct, or otherwise vary anticompetitive conduct and impose appropriate penalties for violators. 

6) Other authorities that also require merger filing or may prohibit transaction
(Note that this may not be an exhaustive list and that industry-specific legislation should always be considered. Furthermore, a merger will often require change of registrations with – but not approval from – the companies register, land register and authorities that have issued permits for the activities of the merging parties.)

Apart from the requirements under the Trade Competition Act and subordinate legislation issued by the TCC, a merger involving business operators engaged in any of the following sectors must additionally comply with the requirements imposed by the relevant sector regulator:   

Broadcasting and Television

Under the Notification re: Regulating Measures for Business Mergers in Radio and Television Broadcasting Businesses (the “RTBB”) issued by the National Broadcasting and Telecommunications Commission:

Any direct/indirect merger where any or all the parties are a Licensee of the National Broadcasting and Telecommunications Commission or a Controlling Person of a Licensee must be notified to the National Broadcasting and Telecommunications at least 30 days before closing the merger, except that:

1. No notification is required if a Licensee or a Controlling Person of a Licensee can demonstrate that after the merger:  (i) such merger involving a broadcasting or television business operator where the resulting entity’s combined assets would not exceed THB 800 million; or (ii) the aggregate value of the assets that would be transferred as a result of the merger would not exceed THB 50 million; or (iii) the annual revenue of the resulting entity would not exceed THB 120 million per year.
2. Notification must be made to the National Broadcasting and Telecommunications Commission within 7 days after closing of the merger where the merger is between :- (i) Licensees or between any Controlling Persons of a Licensee which are in the same group of companies; or (ii) between a Controlling Person and a Licensee which are in the same group of companies.  

The “Licensee” under the RTBB means any licensee who is permitted to conduct a radio and television broadcasting business in accordance with Radio and Television Broadcasting Businesses laws, including those who obtain any license, concession, or agreement to conduct radio and television broadcasting businesses from the government agencies, state enterprises or government authorities valid on the applicable date of laws on Radio and Television Broadcasting Businesses.

Further, the “Controlling Person” under the RTBB refers to shareholders or any person who have effects on policy making management or significant operation of a Licensee in practiceregardless of having influence as shareholders or attorney or by other means.

Telecommunications

Under the Notification re: Regulating Measures for Business Mergers in Telecommunication Businesses (the “TB”) issued by the National Broadcasting and Telecommunications Commission B.E. 2561:

A merger where any or all the parties are a Licensee of the National Broadcasting and Telecommunications Commission or a Controlling Person of a Licensee must be notified to the National Broadcasting and Telecommunications at least 90 days before closing the merger, except that:

1. No notification is required if a Licensee or a Controlling Person of a Licensee can demonstrate that after the merger where (i) such merger involving a telecommunications business operator where the resulting entity’s combined assets will not exceed THB 14 billion; or (ii) the annual revenue of the resulting entity will not exceed THB 2 billion per year; or (iii) the aggregate value of the assets that will receive from the other Licensee will not exceed THB 875 million.
2. Notification must be made to the National Broadcasting and Telecommunications within 7 days after closing the merger where the merger is (i) between Licensees who are in the same group of companies or (ii) between a Controlling Person and a Licensee who are in the same group of companies.
3. Notification must be made to the National Broadcasting and Telecommunications within 7 days after closing the merger where the merger involves a Licensee who is governmental organisation or state enterprise for a purpose of economic or national security or promotion of investment and development of telecommunication industry.

The “Licensee” under the TB means any licensee who is permitted to conduct a telecommunication business in accordance with Telecommunication Businesses laws, including those who obtain any license, concession or agreement to conduct a telecommunication business from the Telephone Organisation of Thailand or Communications Authority of Thailand prior to the effective date of Telecommunications Business Operation Act B.E. 2544.

Further, the “Controlling Person” under the TB refers to shareholders or any person who have effects on policy making management or significant operation of a Licensee in practice regardless of having influence as shareholders or attorney or other sources. 

Banks, Financial Institutions, and Insurance Companies

Mergers involving financial businesses such as banks, financial institutions, and insurance companies require pre-closing approval from the Bank of Thailand and the Office of Insurance Commission, respectively, regardless of annual turnover of the parties involved and the transaction value.

Energy Sector

Mergers involving companies that are licensees of the Energy Regulatory Commission are required to obtain pre-closing approval from the Energy Regulatory Commission, regardless of annual turnover of the parties involved and the transaction value.  

Foreign investment control:

The main law governing foreign investment in Thailand is the Foreign Business Act B.E. 2542 (1999) (“FBA”). FBA regulates the foreign ownership restrictions in reserved business activities as certain types of business activities are reserved for Thai nationals only.

Definitions of Foreigners

FBA defines “foreigner(s)” as:

1. natural person not of Thai nationality.
2. juristic person not registered in Thailand.
3. juristic person registered in Thailand having the following characteristics:
   • having half or more of the juristic person’s capital shares held by persons under (1) or (2); or having any number of persons under (1) or (2) investing with a value of half or more of the total capital of the juristic person;
   • being a limited partnership or a registered ordinary partnership having the person under (1) as the managing partner or manager.
4. juristic person registered in Thailand having half or more of its capital shares held by the persons under (1), (2) or (3) or juristic person having the persons under (1), (2) or (3) investing  in the amount of half or more of its total capital.

FBA only considers the shareholding percentage, and not voting rights or dividend rights to determine the ownership of a company under the FBA. The restrictions imposed under the FBA are triggered when a company that is owned by foreigner(s) starts to conduct business activities in Thailand.

Types of Reserved Business Activities

Potential foreign investors should review the 3 lists of restricted businesses as set out in the FBA to determine whether their proposed business falls under any of the reserved business activities.

List 1 consists of business activities which are strictly prohibited to foreigners:

• newspaper or radio broadcasting stations and radio and television station businesses;
• rice farming and growing plantations or crops;
• livestock farming;
• forestry and timber processing from a natural forest;
• fisheries in Thai territorial waters and specific economic zones;
• extraction of Thai medicinal herbs;
• trading and auctioning of antique objects or objects of historical value from Thailand;
• making or casting of Buddha images and monk alms bowls;
• land trading.

List 2 consists of the activities related to national safety or security, or those which affect arts and culture, tradition, folk handicrafts or natural resources and the environment, the details of which can be found in the FBA.

There are exceptions to List 2 where foreigners can engage activities in List 2 provided that Thai nationals hold at least 40 percent of the capital in that foreign juristic person and two-fifths of the directors must be Thai. The aforesaid exceptions are given under the following circumstances:-

• the Minister of Commerce (with approval from the Cabinet), permits, for a reasonable cause, reduction of the Thai shareholding requirement, which cannot be less than 25 percent of total shares for obtaining a Foreign Business Licence;
• the foreigner has been granted the investment promotion scheme from the Board of Investment (“BOI”);
• the foreigner has obtained the authorisation from the Industrial Estate Authority of Thailand; or
• the foreigner is engaging in a business activity that is being protected under a treaty or obligation to which Thailand is bound.

List 3 consists of business activities for which Thai national are not adequately prepared to compete with foreigners, amongst others, including but not limited to accounting, legal, architectural or engineering services, advertising services, hotels, guided touring, sale of food and beverages and other type of business activities which can be found in the FBA.

There are exceptions to List 3 where foreigners can engage activities in List 3 in any of the following circumstances:

• permission is obtained from the Director-General of the Department of Business Development, the Ministry of Commerce (with approval from  the Foreign Business Board) for obtaining a Foreign Business Licence;
• the foreigner has been granted the investment promotion scheme from the BOI;
• the foreigner has obtained the authorisation from the Industrial Estate Authority of Thailand;
• the foreigner is engaging in a business activity that is being protected under a treaty or obligation to which Thailand is bound; or
• the foreigner is engaging in any relevant businesses that are exempted by the Ministerial Regulation(s) issued by Ministry of Commerce from time to time. 

Minimum Capital Requirement

FBA requires a foreigner to maintain a minimum capital of not less than 2 million Thai Baht (“Baht” or “THB”) for the commencement of the operation of a business in Thailand.  

As for the business requiring permission as specified in the lists above, the minimum capital as prescribed in the Ministerial Regulation for each business shall not be less than 3 million Baht.

Application Procedures

Foreigners who conduct the business activities under List 2 or List 3 but are eligible for the privilege under the treaty or obligation to which Thailand is bound; or who are promoted under the investment promotion scheme shall apply to obtain a Foreign Business Certificate as evidence of the exemptions. The authority will issue the certificate within 30 days of the application submission date.

With regard to the Foreign Business Licence, the Cabinet (for businesses in List 2) or the Director-General (for businesses in List 3) will process an application of a Foreign Business Licence within 60 days from the date of receipt of the said application. The processing period may be extended as necessary by the authorities but in any circumstances shall not exceed a further 60 days.

When approval is granted by the Cabinet (for businesses in List 2) or the Director‐General (for businesses in List 3), the licence will be issued within 15 days from the date of the approval.

Penalties under the FBA

Foreign nationals who violate the provisions of the FBA in relation to conducting business in Thailand without any permission granted, are subject to imprisonment for a term not exceeding three years or to a fine ranging from THB 100,000 up to 1,000,000, or both. A Thai court may also order the violating entity to cease its operations. Any violation of a court order in this regard shall be subject to a daily fine of THB 10,000 to 50,000.

Other Regulations

On top of the FBA, there are other regulations and laws that impose restrictions on foreigners’ participation in specific sectors such as in the financial business, insurance business, land transport business, and real estate related business.

7) Are any parts of the territory exempted or covered by particular regulation?

The Trade Competition Act covers the entire territory of Thailand. No exemption on the basis of territory is granted.

8) Is merger filing mandatory or voluntary?

Merger filing is mandatory, provided the relevant thresholds are met (see topic 14). 

9) Is there a general definition of transactions subject to merger control?

Yes, the Trade Competition Act, in conjunction with subsequent subordinate legislation issued by the TCC, provides that the following transactions constitute mergers subject to merger control if the relevant threshold etc. are met: 

1. a merger between or among producers, sellers, producers and sellers, or service providers, resulting in either one surviving business operator and the other business operators ceasing to exist or a new business operator coming into existence;
2. the acquisition of all or a majority of another business operator’s assets in order to control its management, policies, or administration; and
3. the acquisition of all or part of the shares of a business operator, whether directly or indirectly, in order to control its management, policies, or administration.

10) Is "change of control" of a business required?

Yes, change of control is required in relation to the acquisition of assets or shares. 

A merger for the purpose of business restructuring and/or reorganization between affiliated companies that share a common source of control is not subject to merger control.

11) How is “control” defined?

Subordinate legislation issued by the TCC provides the following criteria in determining control in asset and share acquisitions: 

1. Acquiring assets exceeding 50% of the total value of assets used by another business operator in the ordinary course of business; 
2. Acquiring, whether directly or indirectly: (i) shares, warrants, or other securities convertible into shares representing more than 25% of the voting rights in a business operator that is a listed public company; or (ii) shares representing more than 50% of the voting rights in a business operator that is not a listed public company. 

12) Acquisition of a minority interest

Generally, acquisition of a minority interest that does not result in a business operator gaining control over another is not subject to merger control. However, note as mentioned in topic 11, that acquisition of more than 25% of the voting rights in a business operator that is a listed public company is considered to generate control.

13) Joint ventures/joint control – which transactions constitute mergers?

The TCC has not yet issued any subordinate legislation in relation to joint ventures. The definition of a merger under the Trade Competition Act does not expressly include joint ventures.

Thus, a joint venture will only be caught by the merger control regime established under the Trade Competition Act if the relevant transaction falls within the general definition of a merger specified under topic 9.  For this purpose, a joint venture established through the acquisition of the shares or assets of another business operator within the thresholds discussed in topic 14 will likely trigger merger control regulation. Likewise, a joint venture where the parties incorporate a new business operator that meets these thresholds may likewise trigger merger control regulation. 

14) Which thresholds decide whether a merger notification must be filed?
(Unless explicitly stated otherwise, the thresholds described under one threshold category are not cumulative with those described under another category. Thus for instance if there is a market share threshold and a turnover threshold, it is sufficient to meet one of these, unless stated otherwise.)

a) Turnover thresholds

A merger notification must be filed if the annual turnover of any or the combined annual turnover of all the business operators involved in a merger is at least THB 1 billion. For the purpose of calculating annual turnover of a business operator, the turnover of all entities sharing a common source of control, and therefore considered as a single economic entity, shall be included.  

Pre-merger approval by the TCC is required if an intended merger meets the aforesaid turnover threshold and the intended merger would result in monopoly or dominant position. For this purpose, a business operator is considered to be a monopoly if it is the sole business operator in a particular market and it has the absolute power to determine the price and supply of its goods and services. On the other hand, a business operator is considered to be in a “dominant position” if it is either: (a) a business operator holding a market share of at least 50%; or (b) one of the top three business operators with a collective market share of at least 75%, unless its market share is less than 10%. 

Post-merger notification is required if the merger would result in the substantial reduction of competition in a given market. The TCC deems that there is “substantial reduction of competition” if the annual turnover of any or the combined annual turnover of all the business operators involved in a merger is at least THB 1 billion, but the intended merger would not result in monopoly or dominance.

b) Market share thresholds

Please see the turnover threshold above. 

c) Value of transaction thresholds

N/A

d) Assets requirements

In relation to an asset acquisition, where the business operators involved meet the turnover thresholds prescribed by the TCC (see the turnover threshold above), the acquisition by a business operator of assets exceeding 50% of the total value of assets used by another in the ordinary course of business would trigger pre-merger approval.

e) Other

In relation to a share acquisition where the business operators involved meet the turnover thresholds prescribed by the TCC (see response to topic 14(a)), the acquisition by a business operator of either (a) shares, warrants, or other securities convertible into shares representing more than 25% of the voting rights in another business operator that is a publicly listed company; or (b) shares representing more than 50% of the voting rights in another business operator that is not a publicly listed company would trigger pre-merger approval.

15) Special thresholds for particular businesses

The thresholds stated in topic 14 apply to all transactions. That being said, transactions involving business operators in the sectors specified under topic 6 are additionally subject to the sector-specific thresholds mentioned therein.

16) Rules on calculation and geographical allocation of turnover

The OTCC calculates a business operator’s turnover based on total revenue before taxes generated from the sale of goods and services during the previous financial year. This would include revenues generated by affiliated businesses that share a direct or indirect source of control (i.e., all business operators within a single economic entity). 

Although the Trade Competition Act does not require a business operator to disclose the geographic allocation of its annual turnover, the OTCC may, at its discretion, request the same. Moreover, in practice, parties to an intended merger usually provide information on the geographic allocation of turnover.  

Is the seller/seller's group turnover relevant in a standard acquisition of sole control?

No. 

17) Special rules on calculation of turnover for particular businesses

The rules on calculating turnover provided in topic 16 applies to all business operators. 

18) Series of transactions that must be treated as one transaction

There are currently no regulations or guidelines for this. 

19) Temporary change of control

No exemption is provided for temporary change of control. A transaction that meets the thresholds specified under topic 14 will trigger pre-merger approval or post-merger notification requirements even if any resulting change in control is only temporary and not made on a lasting basis.  

20) Special industries, owners or types of transactions

The merger control regime under the Trade Competition Act does not exempt special industries, owners, or types of transactions from its requirements. 

21) Transactions involving only foreign businesses (foreign-to-foreign)

There is no exemption for foreign-to-foreign transactions. All transactions that meet the thresholds specified under topic 14 are subject to merger control regardless of where the undertakings concerned are registered, operate or own assets provided that any or all business operators involved carry out business activities in Thailand. For this purpose, the Trade Competition Act defines a business operator carrying out its business in Thailand as any vendor, producer, buyer, importer, or service provider who sells, produces, buys, imports, or otherwise provides goods and services to customers or end users in Thailand, whether or not such business operator is established in Thailand. 

22) No overlap of activities of the parties

There is no exemption for a merger where there is no overlap in the activities of the relevant business operators. 

23) Other exemptions from notification duty even if thresholds ARE met?

N/A

24) May a merging party file voluntarily even if the thresholds are not exceeded?

A party to an intended merger may voluntarily request for pre-merger approval or file a post-merger notification to the TCC even if it is not sure that the thresholds are met. The OTCC, however, may outright reject such request or filing if it deems that the relevant thresholds have not been met. 

25) May the competition authority request a merger notification or oppose a transaction even if thresholds are not met?

No. 

26) Referral within the jurisdiction

N/A

27) Referral from another jurisdiction

N/A

28) Referral to another jurisdiction

N/A

29) May the merging parties request or oppose a referral decision?

N/A

30) Stage of transaction when notification must be filed

If a transaction requires pre-merger approval by the TCC, such approval must be obtained before closing. If a transaction only requires post-merger notification, such notification must be made within seven days from the date of the merger. For this purpose, the date of the merger is defined as the date when (a) the business operator either commences or terminates its existence, as the case may be; (b) the transfer of assets is completed; or (c) the transfer of shares is completed, as a result of the transaction.   

31) Pre-notification consultations

The procedure for official pre-notification consultations in relation to an intended merger has not been specified by the TCC. This, however, does not preclude business operators who are parties to an intended merger from engaging in informal consultations with the TCC.   

32) Special rules on timing of notification in case of public takeover bids and acquisitions on stock exchanges

The TCC has not issued special rules on timing of notifications in case of public takeover bids and acquisitions on stock exchanges. Hence, the general timing of notifications specified in topic 30 shall similarly apply to these transactions. 

33) Forms available for completing a notification

There are two forms available: one for pre-merger filing and another for post-merger notification. Official forms are only available in the Thai language.  

34) Languages that may be applied in notifications and communication

Thai.

35) Documents that must be supplied with notification

The following information and documents must be supplied when pre-merger approval is required: 

1. merger plan and implementation timeline;
2. details of the merging parties, which must include the shareholding structure, voting rights, sales turnover, and market share;
3. studies and analyses in respect of the merger transaction which must include: (i) analysis on the shareholding structure and control over the merging parties for the purpose of ascertaining the relationship in policy or directive power before and after the merger; (ii) analysis on the product or service market for the purpose of ascertaining the effects of the merger, which must include: (a) market structure before and after the merger; (b) market scope; (c) market share of each of the parties before and after the merger; (d) turnover of each of the parties before and after the merger transaction; (e) effect of the merger transaction in respect of market concentration, market entry and expansion, non-coordinated effects, coordinated effects, effect on the economy or consumers as a whole and other effects on competition and (f) efficiencies resulting from the merger; 
4. studies and analyses in relation to: (i) business-related necessities and benefits of the merger; (ii) potential damage to the economy; and (iii) consumer benefits as a whole.

The following information and documents must be supplied when only a post-merger notification is required: 

1. copy of documents submitted to the Ministry of Commerce, in case of an amalgamation;
2. copy of documents submitted to the Securities and Exchange Commission, if shares were acquired through a tender offer;
3. copy of definitive agreements and/or documents in relation to share/asset acquisition;
4. copy of the minutes of executive committee’s meeting or shareholders’ meeting where the merger transaction was approved by each of the parties, or other documents evidencing the parties’ intention to enter into the merger;
5. other particulars of the merger, such as information on the relative market shares of the business operator and its competitors;
6. annual meeting reports and audited financial statements for the preceding three years of each of the parties; and
7. copy of the list of shareholders of each of the parties before and after the merger. 

36) Filing fees

The filing fee for pre-merger approval is THB 250,000. No filing fee is charged for post-merger notifications.

37) Is implementation of the merger before approval prohibited?

If a transaction requires pre-merger approval by the TCC, such approval must be obtained before closing and implementing the transaction. Closing or implementing a transaction before obtaining TCC approval is prohibited. 

38) May the parties get permission to implement before approval?

The TCC has not established a system or procedure where permission to implement a merger prior to approval may be obtained. 

39) Due diligence and other preparatory steps

There are no guidelines on what may be considered acceptable preparatory steps. An explicit exemption is not required for standard due diligence and other preparation measures without effect on the market. Due diligence must be conducted in a way that prevents sensitive market information from being used for purposes other than assessing the viability of the merger.

40) Veto rights before closing and "Ordinary course of business" clauses

An "ordinary course of business" clause that prevents the target company from taking decisions outside the course of its ordinary business until the closing date is generally considered acceptable.

However, it must be assessed on a case-by-case basis to what extent the parties may discuss – or provide each other with veto rights concerning decisions in their respective businesses.

41) Implementation outside the jurisdiction before approval – "Carve out"

There are no specific rules on “carve out” of the Thailand part of a transaction to avoid delaying implementation in the rest of the world pending approval in Thailand. It must be assessed on a case-by-case basis whether it is possible to carve out the Thai part of a transaction. 

42) Consequences of implementing without approval/permission

Parties may be fined of up to 0.5% of the transaction value if a merger requiring pre-merger approval is implemented before TCC approval is obtained. The TCC may additionally suspend, cease, correct, or otherwise vary the merger if it is found to be anticompetitive.

Additionally, any party who has suffered a loss arising therefrom is entitled to seek damages before the appropriate court. 

43) Phases and deadlines

44) Tests or criteria applied when a merger is assessed

In granting approval to a merger, the TCC may consider any valid business-related necessities, benefits and efficiencies accruing to the business operators involved, potential damage to the economy arising from the transaction, and the impact of the transaction on consumers in general.  

45) May any non-competition issues be considered?

No.

46) Special tests or criteria applicable for joint ventures

No.

47) Decisions and remedies/commitments available

A merger may be approved, approved with conditions/commitments or prohibited. Approval with conditions can be given if it the TCC deems it necessary, such as a condition to divest certain business units in order for a merger to be approved. 

The TCC may revoke an approval partially or entirely if at any time it becomes aware that incorrect or misleading information has been provided by the parties or if the parties do not comply with the conditions/commitments contained in the approval or not comply within a certain timeframe.

48) How and when will details about the merger be published?

The OTCC generally does not publish decisions of the TCC on merger control. In practice, the OTCC only notifies the parties of the TCC’s decision and any announcement is made by the parties themselves. 

49) Access to the file for the merging parties and third parties

The merging parties:

The merging parties’ right to access files related to the transaction only includes access to the application for pre-merger approval or the post-merger notification, as the case may be, and the decision of the TCC. The parties, however, do not have the right to access the TCC’s and OTCC’s internal documents and correspondence with third parties relating to the transaction.  

Third parties:

Third parties do not have access to files related to a transaction. There is no repository of TCC decisions which may be accessed by such third parties. The TCC and OTCC, however, are not prohibited from eventually establishing such repository to provide third parties with non-confidential versions of notifications and other documents in connection with decisions on merger control. 

50) Who can appeal and what may be appealed?

Decisions of the TCC on merger control are considered administrative decisions and may therefore be appealed to the Administrative Court. The parties to a merger may appeal a denial by the TCC, while other parties-in-interest may appeal a decision approving a merger.