Mergers and Acquisitions In Thailand
A merger takes place when two different companies combine together to form a single business organization.
On the other hand, an acquisition refers to the process of purchasing another company or firm. Acquisitions are also known as takeovers and can be both amicable and hostile. Generally, acquisition processes are very complicated and time-consuming.
The Acquisition Process involves:
- The two companies develop a Memorandum of Understanding (MOU) or Letter of Intent (LOI). They have to discuss the confidentiality terms and the binding terms and mention these in the MOU.
- The buyer company should verify with the target company, any issues related to the business, property declared, legalities, history, finance etc.
- After the verification process, both parties enter the buy-sell negotiation. Any concerns from the verification stage shall be negotiated and settled accordingly.
- The companies prepare the documents related to the sales and purchase agreements.
- When the documents are duly signed and affixed with the company seal, it must be validated under the Civil and Commercial Code of Thailand.
The Merging Process involves:
- Both parties to the merger have a shareholders’ meeting and each separately resolves to proceed with the merger, with no less than three-fourths (75%) of the total shares being represented at the meeting.
- A notice of the meeting should be sent to all shareholders, fourteen (14) days prior to the meeting
- Both parties to the merger must register a special resolution of the merger within fourteen (14) days after the first resolution.
- Both parties to the merger need to advertise, at least once, the intention to merge in a local newspaper for it to reach more people, specifically shareholders who could have missed the meeting.
- Both the parties to the merger have to send a registered mail to the directors of the respective company to check whether there is any opposition to the merger within 60 days.
- After 60 days, shareholders of both parties to the merger consider meeting, to discuss details of the newly merged company.
- The merged resolution needs to be made and the company can be registered within 14 days of the resolution.