After a slow start to Thailand’s dealmaking scene in 2023, mergers and acquisitions (M&A) activities are expected to tick up in the second half of the year, with businesses finally taking their feet off the brakes. But lawyers say that companies need to navigate not just tight monetary conditions and heightened geopolitical risks, but also a murky political situation in Thailand. 

High-interest rates, geopolitical uncertainty, and heightened regulations have severely stymied the wave of dealmaking that reached its peak in 2021 during the COVID-19 pandemic. Thailand, the second largest ASEAN economy, was not unscathed either, with both deal volume and value experiencing a slowdown in the first half of 2023 as a result of delayed transactions.

But things are starting to look up. Chantanuch Chotikapanich, deals leader at PwC Thailand, has predicted that Thailand’s mergers and acquisitions activities are likely to pick up for the remainder of the year.

“Thailand’s M&A deals are likely to recover in almost every sector. Whether it’s businesses looking to expand their operations, acquire new portfolios or venture into new s-curve industries, they’re all reviving their M&A activities again,” says Chantanuch in a PwC report, calling 2023 “a great year for businesses who are interested in buying or selling through M&A”.

Meanwhile, 60 percent of CEOs surveyed said they are not planning to delay deals this year despite some negative economic factors impacting businesses, according to PwC’s 26th Annual Global CEO Survey.

Economists are predicting a pause in the Thai central bank’s monetary tightening cycle after Thailand’s GDP rose 1.8 per cent year on year in the second quarter, missing market estimates. High rates have led to expensive acquisitions, tamed asset valuations, and complicated financing options both pre- and post-acquisition, sapping the appetite of dealmakers and investors. The pause in the rate cycle could be a lifeline.

Sooksun Popun-Ngarm, a senior associate at Chandler MHM, thinks it’s unlikely a potential rate pause might immediately shift the outlook for deal-making throughout the remainder of the year.

“The persistence of high-interest rates continues to influence M&A dynamics, and the recent increase in the policy rate to 2.25 percent by the Monetary Policy Committee of the Bank of Thailand on Aug. 2, marking its highest level in nine years, underscores the current challenges in the financial landscape,” explains Sooksun. “The heightened cost of borrowing inevitably leads to a more thorough assessment of the deal’s value within the context of the current business landscape.

But Sooksun believes there have been valuable dealmaking opportunities in the market.

“This is especially evident in targets with small or medium enterprise values, as such deals typically require less financing, allowing valuations to remain relatively stable despite prevailing interest rates. This encourages sellers to consider transactions,” says Sooksun.


The positive sentiment is echoed by Nuanporn Wechsuwanarux, a corporate partner at Chandler MHM. “Since the start of the year, we have advised on a range of M&A transactions, both inbound and outbound, and a cross-border acquisition encompassing different sectors. Active sectors include renewable energy, F&B, automobile-related, manufacturing, and TMT. We are now seeing a sharp pickup in M&A activity in the final quarter of the year,” notes Nuanporn.

In an interview with ALB earlier this year, Chandler MHM was bullish about deal flows in the clean energy and infrastructure, technology, e-commerce, insurance and healthcare sectors. Nuan-porn says deal flows remain strong in these industries while ESG-propelled diversification continues to dominate a proportion of transactions. Furthermore, the strong momentum in Thailand’s manufacturing sector is likely to translate into a robust deal-making scene. “We see a steady flow of transactions in the TMT and manufacturing sectors (whether acquisitions or disposals). The move towards diversification of supply chains will result in some new investment in Thailand,” says Nuanporn.

Nuanporn notes that Thailand remains a popular investment destination from countries across Asia, including Japan and China, because of its “well-established manufacturing base and incentives.” “Investment from Japan remains strong, and we are seeing increasing interest from China,” she notes.

Across the board, Nuanporn points out trends, including energy transition, adoption of ESG principles, and digital transformation will drive some M&A transactions. “For example, traditional energy companies have been diversifying into other industries, and investment into clean energy remains strong,” she says. Despite the optimistic predictions, investors have been cautiously keeping an eye on Thailand’s political situation, which since the general elections in May has been marred in uncertainties. In August, real estate tycoon Srettha Thavisin of the Phew Thai party was voted as the country’s 30th prime minister, putting an end to three months of political deadlock after Pita Limjaroen-rat, the progressive Harvard graduate who won the most votes, failed to secure enough parliamentary support to claim the premiership.

Sooksun believes the appointment of a new prime minister will conclude the political uncertainty in Thailand and thus is good news for investment. “Investors are now anticipating a clear stance from the new government regarding their strategies for business investments. A heightened sense of stability is anticipated within the investment landscape, consequently leading to an upswing in M&A activities,” says Sooksun.

“We anticipate forthcoming government announcements concerning business policies, along with the resumption of deliberations on critical bills that have a significant impact on investments in Thailand—examples being regulations on electric vehicles and climate change policies. Overall, the presence of a new leadership dynamic is anticipated to infuse a renewed sense of certainty, consequently stimulating a surge in M&A transactions,” he adds.


“To effectively address the complexities of this evolving landscape, law firms must invest to cultivate a deep-seated understanding of the local legal intricacies, prevailing business environment, and geopolitical risks.”
— Nuanporn Wechsuwanarux, Chandler MHM


Looking more broadly across Southeast Asia, foreign direct investment continues to be robust. Law firms in Thailand, hence, need to position themselves to advise on the rising cross-border investment within ASEAN jurisdictions, according to Nuanporn.

“To effectively address the complexities of this evolving landscape, law firms must invest to cultivate a deep-seated understanding of the local legal intricacies, prevailing business environment, and geopolitical risks. This multifaceted understanding is necessary in rendering legal services that are efficient and streamlined within the realm of cross-border investment across the ASEAN region,” says Nuanporn.