M&A transactions in Thailand are similar to M&A transactions in other jurisdictions in respect of the need to conduct an initial antitrust review at the early stage of a transaction since the 2017 Trade Competition Act of Thailand (TCA) came into existence. There are two key aspects: (1) pre-merger approval filing and post-merger notification filing under merger control regime, and (2) cartel risks during and after the due diligence process. As TCA and its enforcement are relatively new, some operators might not yet have a full grasp of what TCA requires on these two fronts, particularly the cartel risks.

Merger Filing

The TCA captures corporate amalgamation, share acquisition and business/asset acquisition. TCA prescribes three doors for a prospective merger to go through. If the merger would result in a creation or an enlargement of a dominant operator, the parties must file a pre-merger approval application with the Trade Competition Commission of Thailand (TCCT). If the merger would cause a material reduction of competition, the acquirer or resultant entity must file a post-merger notification report to the TCCT. Each requirement has its own statutory timeline that may have a significant impact on the transaction timeframe and legal costs. If the merger falls under neither of the two categories above, the parties would not be required to make any filing. Cartel Risks

Besides merger filing requirements, the parties should be cautious of cartel risks arising from an exchange of certain information during the due diligence period. The risks might materialize if the transaction does not proceed as expected, as both sides, or at least one, would leave the negotiating table with sensitive commercial information of the other party, which could be used to create a cartel. Even a lawful benchmarking activity could inevitably lead to a costly, although defensible, investigation. It should be stressed that the TCCT and its officers would generally look for common pricing strategies and trade conduct as a sign of a possible cartel, and any amendment of practices by one or both sides to the prospective or failed M&A transaction could lead to a suspicion. Therefore, the merging parties must ensure that both sides are aware of the risks and institute necessary contractual provisions to deter a use of such sensitive information, to protect confidentiality, and to employ appropriate measures such as Chinese walls to safeguard information between business units.