Acquisition Finance 2024 Comparisons

In the Thai financing market, financial institutions, particularly commercial banks, are the predominant lenders. The major banks, as ranked by the Bank of Thailand, include:

• Bangkok Bank Public Company Limited;
• Krung Thai Bank Public Company Limited;
• KASIKORNBANK Public Company Limited;
• The Siam Commercial Bank Public Company Limited; and
• Bank of Ayudhya Public Company Limited.

The Export-Import Bank of Thailand and the Government Savings Bank also play significant roles in the market, especially in project finance deals. 

For lending Thai baht to Thai borrowers, the lenders are almost exclusively Thai commercial banks. International banks may participate in transactions involving foreign currencies, requiring special support from development finance institutions or in cases where the transaction value exceeds the single-lender limit imposed on Thai commercial banks. 

Compared to local commercial banks, offshore funds and other non-bank entities have a smaller role in the market, and bond issuances are typically used for refinancing purposes. 

In Thailand, the corporate financing market is primarily dominated by major local banks, yet there is growing interest in alternative financing strategies such as leveraged buyouts (LBOs). Although not as prevalent as in Western markets, LBOs are becoming more common as Thai corporations and private equity firms use debt to enhance potential returns on investments. For LBOs, it is more common for the shares of the target to be used as security for acquisition finance rather than the target’s assets. It should be noted that, despite the lesser use of the target’s assets to secure transactions, this practice is generally not prohibited by law. Please also see 5.6 Other Restrictions for additional information about other restrictions in cross-border acquisition finance.  

Thai law is almost always the choice in transactions involving Thai lenders, and this applies equally to corporate loans, acquisition finance and LBOs. International lenders may prefer English law or Singaporean law, which are also widely accepted in the market.  

For security documents and guarantees, the concept of lex situs is commonly used, meaning Thai law is often chosen if the security provider or guarantor is Thai or has significant assets in Thailand. Alternatively, parties may choose to have the security documents follow the governing law of the facility agreement (eg, English or Singapore law), but these security documents may still be interpreted under Thai law by Thai courts.  

In practice, to ensure enforceability in Thailand, security documents concerning assets in Thailand often include clauses that comply with Thai legal requirements. Thai courts treat the governing foreign laws of such documents as factual matters, requiring the disputing party to present relevant foreign laws and their interpretations alongside the facts of the transaction. Thai courts have full discretion to accept or reject the presentation of these foreign laws. 

There is not a universally adopted standard form in the market. Institutional lenders typically use internal forms for loan agreements with retail and SME borrowers, which are less relevant to the corporate lending sector.  

Leading law firms often utilise and adapt APLMA standard documentation for syndicated lending, which has gained prevalence in the market. However, modifications are required to incorporate Thai legal elements to ensure enforceability in Thailand. APLMA’s provisions and guidelines, similar to ISDA’s for derivative agreements, serve as a dependable starting point, and parties often refer to APLMA’s wording during deadlocks in negotiations.  

The choice of language in documents largely depends on the parties’ discretion, and the use of the Thai language is not mandatory. For documents requiring submission to government agencies, Thai is often used to avoid the burden of translation. 

In corporate finance and acquisition finance, English is commonly used, even if both the lenders and the borrower are Thai, especially in syndicated loans. However, for bilateral or club loan agreements, lenders may prefer that a facility agreement be written in Thai using their internal forms. 

Documents in foreign languages must be translated into Thai to be admissible in Thai courts. The exceptions are cases brought before the Central Bankruptcy Court or the Central Intellectual Property and International Trade Court, where English documents may be admitted without translation if the parties agree and the court deems that the document is not central to the main issue of the case. 

Legal opinions are commonly required as conditions precedent in financing transactions, including acquisition financing. However, if the lender uses in-house counsel instead of engaging external legal advisors, a legal opinion may not be required.  

Like international practices, depending on the transaction’s nature and the involved jurisdictions, legal opinions typically cover the obligor’s capacity under the finance documents, as well as the execution and enforceability of these documents. Typically, the lender’s counsel issues the legal opinion, which may be supplemented by another opinion from counsel in the relevant jurisdiction regarding the obligor’s capacity, if not covered by the lender’s counsel.   

In some cases, parties may request that the legal opinion also covers the enforceability of share purchase agreements or other acquisition documents, in addition to the finance documents. Lender’s counsel may be reluctant to issue such an opinion and might request that the borrower’s or seller’s counsel provide it. 

Senior loans in the Thai financing market typically include one or more term loan tranches, each designated for specific uses, such as the acquisition of different targets. There may also be a revolving facility tranche for working capital expenditures. 

In terms of structure, lenders often prefer that the bidder company (bid co) takes out the loan to structurally prioritise their interests above those of the holding company’s (hold co) lenders. In some cases, conglomerate businesses utilise a holding company as their investment arm, obtaining financing directly instead of forming a new SPV for each acquisition. In smaller transactions, it is not uncommon for the acquirer to use its operating company to acquire the target and secure funding, without establishing an SPV or a designated holding company within the group. 

Mezzanine or payment-in-kind loans are relatively rare in domestic acquisitions within Thailand, with most occurrences involving cross-border transactions and foreign lenders.  

Bridge loans serve as interim financing to connect the borrower with a future term loan facility, often secured by shares of the target company. Borrowers typically use bridge financing to complete an acquisition and then refinance it with a long-term solution once the acquisition is complete. However, in the Thai market, bridge loans are less common as lenders usually prefer term loan arrangements. Consequently, parties often opt for term loan financing from the start, rather than transitioning from a bridge loan at a later date. 

Bonds are typically used to refinance existing financial indebtedness. The issuance and offering of bonds are regulated under the Securities and Exchange Act B.E. 2535 (1992) (as amended) (the “SEC Act”), which includes stringent protections for bondholders. This regulatory framework can complicate and prolong the issuance and offering process, making bonds less suitable for the time-sensitive nature of acquisition finance deals. 

Private placements (either equity or debt) and loan notes are rarely utilised to raise funds for acquisition finance. Loan notes are particularly uncommon due to stringent Thai regulations, which are designed to ensure their transferability by specifying required details and shortening review and negotiation times. These details must include:

• the loan note’s indication;
• an unconditional order to pay a specified sum;
• the payer and payee names;
• the due date;
• the place of payment;
• the issuance date and location; and
• the issuer’s signature.

Any conditions beyond these details are deemed invalid if included in a loan note. Thus, complex structured loan notes that detail events of default and conditional repayment dates are treated not as loan notes but as loan agreements under Thai law. 

Asset-based financing typically focuses on the acquired assets. In share acquisitions, the acquired shares are often pledged or used as share collateral, depending on their nature. In asset deals, the acquired assets themselves are used as security, depending on the asset type. Additionally, the acquirer may provide other owned assets as security. Please see 5. Security for additional information about security in acquisition finance. 

Lenders may impose security covenants in addition to typical cashflow-based financial covenants. For instance, a loan-to-value (LTV) ratio covenant ensures that if the asset value falls below an acceptable level, the borrower must provide additional collateral within a specified grace period. 

Intercreditor agreements in the Thai market do not differ from the those commonly used in other jurisdictions. They typically address issues amongst the lenders including:  

• order of priority;
• subordination arrangements; and 
• security sharing.  

Although there are generally no legal restrictions or prohibitions on intercreditor agreements in Thailand, they are enforceable only among the signing parties and not against third parties. Therefore, the borrower is often required to be a party to the intercreditor agreement to agree to and acknowledge the subordination arrangements between lender groups and to perform as required under the agreement. 

Bond financing is uncommon for acquisition financing in Thailand; hence, intercreditor agreements involving arrangements between senior lenders and bond/noteholders are rare. 

While hedge agreements are not mandatory in Thailand’s acquisition financing market, they are commonly used. In transactions involving hedge agreements, if the hedge counterparties are either among the lenders or are approved hedged counterparties, they typically hold a rank pari passu with the senior lenders. 

Under Thai law, a security interest can only be created through a mortgage, a pledge or a business security agreement.  

A mortgage can only cover real property, registered machinery and vessels, requiring registration with the competent authorities (ie, the Land Office, the Central Office for Machinery Registration or the Marine Department, as applicable).  

A pledge can be created over movable property, shares and other legal instruments (eg, bonds, bills of exchange, promissory notes and warehouse warrants). Perfection of a pledge primarily hinges on the delivery of possession of the pledged property (and, for shares, a recording of the pledge in a share register); therefore, pledging inventory or commodities is impractical.  

For scripless shares in a listed company, the security similar to pledge is created via a “share collateral agreement” where the delivery of the share certificates requirement is removed. 

While assignments of rights, accounts or receivables are commonly used in various types of financing (eg, corporate loans, project finance and acquisition finance), such assignments do not create a security interest under Thai law. Instead, they only serve as contractual arrangements between the parties.   

To address the limitations inherent in pledges and assignments, the Business Security Act B.E. 2558 (2015) was enacted to introduce a relatively new type of security interest, known as a business security agreement (BSA). A BSA creates a security interest similar to the common law’s floating charge concept, allowing registration through a portal linked with the Department of Business Development, Ministry of Commerce (DBD). A BSA can cover:

• the entire business;
• movable property used in the business (including aircraft, machinery (registered or not), raw materials and inventory);
• contractual rights (including accounts, insurance, and transaction documents); and
• intellectual property.  

It is worthwhile noting that only financial institutions regulated by the Bank of Thailand (BOT) or other financial organisations specified in ministerial regulations can be security receivers under a BSA. Foreign lenders may benefit from a BSA only if they participate in syndication with Thai bank(s).  

Common security packages in acquisition finance transactions include the following. 

Shares

Shares are created by way of pledge or share collateral agreement by the parent company of the borrower or the target, operating company or material subsidiaries.  

Share pledge

Thai law mandates that for a pledge to be valid, the pledged property must be delivered to the pledgee. Thus, for shares, the share certificates must be handed over to the pledgee for the creation of the pledge. In addition, for the pledge to be recognised by and enforceable against the company and third parties, the pledgee must ensure that the pledge is recorded in the company’s share register.  

Share collateral agreement

Under the SEC Act, share collateral agreements generally adhere to the pledge concept outlined in general commercial laws. However, it is used for scripless shares security as there are no delivery requirements due to the scripless nature of the shares. Also, share collateral agreements must be arranged through a licensed broker or custodian.  

Real Property

Real property is material land or buildings for the target or group.  

Mortgage

Mortgage agreements must be made in writing and registered with the competent authorities. For mortgages over land and/or buildings, registration is required at the relevant land offices. The mortgage agreement itself is usually a one page document prepared according to the format prescribed by the Department of Lands. However, the parties may attach the commercial terms agreed upon as an annex to the mortgage agreement. Thai law requires mortgage agreements to cover specific topics such as the details of the mortgaged properties, the maximum amount secured, and the nature of the obligation secured. 

BSA

BSAs can serve as security for immovable property, provided the security provider is directly engaged in the real estate business. Please see above for details on perfection requirements. Due to the limited application of BSAs over immovable property and the market’s familiarity with the mortgage enforcement and registration process ‒ particularly the recording of mortgages in relevant land title deeds ‒ using a BSA over land and buildings is not commonly included as part of a standard security package. 

Bank Accounts and Receivables

Bank accounts and receivables are created by an assignment or a BSA, covering accounts/receivables of the target or operating company. Note that Supreme Court precedents indicate that a pledge of account (being right to a deposit) cannot be created. 

BSA

BSAs must be made in writing and registered by the security receiver through an online registration system linked with the DBD’s system. The DBD’s system only allows the security receiver to obtain registration access. In practice, parties may include in an agreement or in a separate consent form that the security provider authorises the security receiver to register the BSAs with the DBD. There is no template agreement or the DBD’s agreement form for the parties to use.     

In the registration system, the security receiver must enter specific information about the security and underlying transactions. It is common for BSAs to include the contents of the registration particulars. These details typically cover, but are not limited to, the identities of the security provider and the security receivers, the underlying secured debt, the specifics of the security provided, the maximum secured amount and the enforcement events. 

Assignment

An assignment of accounts or receivables is made in writing between the assignor and the assignee. It can be only enforced against the debtor (eg, the account bank or the counterparty of the transaction documents) after serving a notice of assignment to the debtor or obtaining written consent from the debtor.  

In practice, account banks may not be willing to acknowledge to the assignment unless they are one of the lending banks. Again, it is important to note that an assignment does not grant the assignee secured creditor rights.  

In some cases, machinery may also be secured through a mortgage or a BSA, though machinery mortgages are quite industry-specific.  

Please refer to 5.1 Types of Security Commonly Used.  

Please refer to 5.1 Types of Security Commonly Used.  

There are generally no restrictions regarding upstream security, except for the foreign business licence issue applicable to the provision of a guarantee or security by a foreigner discussed below. Please refer to 5.6 Other Restrictions for additional information. Despite no explicit corporate benefit tests under Thai law, the director will still have to fulfil their fiduciary duties to the company in providing such upstream security.  

There are no prohibitions or restrictions on financial assistance under Thai law. However, if the listed company is providing a financial assistance, the SEC’s regulations regarding connected transaction requiring disclosure compliance and corporate approvals may become relevant.  

Cross-border acquisition finance often involves an upstream guarantee or security by subsidiaries in Thailand. If the Thai subsidiary is considered a “foreigner” under the Foreign Business Act B.E. 2542 (1999) (FBA), it could trigger licensing obligations, and the provision of an upstream guarantee or security may require a foreign business licence (FBL). According to the FBA, a “foreigner” includes foreign individuals, entities and Thai companies that are majority-owned by foreign parties. 

The DBD interprets that the provision of guarantees or securities by “foreigners’” acting as third-party security providers, falls within the category of “Service Business” ‒ specifically Item 21 of List Three under the FBA. Such interpretation is evidenced by the DBD’s rulings published on its website. Although the DBD’s rulings are not laws, the Thai market has adopted the practice where a guarantor or third-party security provider registered in Thailand (but majority owned by foreign entities and considered a foreigner) providing an upstream guarantee or security is required to obtain an FBL for the provision of a guarantee or security. The DBD considers the granting of an FBL on a case-by-case basis, and there is no guarantee as to whether an FBL for each transaction will be successfully obtained.   

This restriction is under review by the DBD, and they are planning to issue a ministerial regulation to exempt domestic guarantee provision services among affiliated companies. 

Please refer to our Trends and Developments article for detailed information about this topic.

Share Pledge and Share Collateral Agreement 

In the context of a share pledge or share collateral agreement, the secured party must first issue a written notice to the borrower (and the security provider, if it is not the borrower). This notice should demand repayment of the loan, including any accrued interest and additional charges, within a designated reasonable period. If the borrower (and the third-party security provider) fails to fulfil this repayment obligation, the secured party is entitled to enforce the security over the shares. 

For private company shares (and non-listed public company shares), enforcement must occur through a public auction, ensuring that the shares are sold at a fair market price. Thai law prohibits direct foreclosure of shares, meaning the secured party cannot assume ownership directly upon default without undergoing a formal enforcement procedure. 

On the other hand, the enforcement of listed company shares can be executed by selling the shares on the SET following its regulations or through a public auction outside the SET. In practice, however, listed company shares are almost always enforced by sale on the SET. In the event of a public auction, the secured party must provide the security provider with written notification detailing the auction’s timing and location. 

Mortgage 

Mortgage enforcement in Thailand can proceed through several avenues: public auctions conducted either through court proceedings or outside of court, or by foreclosure. 

For public auctions initiated through court proceedings or by foreclosure, the Civil and Commercial Code of Thailand (CCC) requires the mortgagee to notify the debtor to fulfil their obligations within a minimum of 60 days. Failure to comply allows the mortgagee to seek court intervention to auction the mortgaged property. Additionally, if the mortgage involves a third party, they must be notified within 15 days of the debtor’s notice; otherwise, they are exempt from subsequent interest and costs after this period. 

Foreclosure through the court is allowed under specific conditions, including the absence of other mortgages or rights on the property, non-payment of interest for five years, and court conviction that the property’s value is insufficient to cover the owed amount. 

Alternatively, out-of-court public auctions are permissible when the secured obligation matures, provided no other mortgages or rights exist on the property. Here, the mortgagor’s written consent allows the mortgagee to auction the property publicly, which must occur within one year of notice receipt to avoid freeing the mortgagor from subsequent interest and costs. 

BSA 

BSA over accounts 

For a BSA covering bank account deposits with the financial institution acting as both lender and security receiver, the security receiver may deduct the deposit towards the outstanding debt upon an enforcement event, provided that they notify the security provider within seven days from the deduction date. 

BSA over other rights/assets 

Generally, BSA enforcement allows for public auction or foreclosure of the secured asset. The process requires the security provider’s consent for the asset’s possession transfer to the security receiver. Should the security provider withhold consent, a court could authorise the asset’s sale or foreclosure. 

The enforcement of the BSA might present uncertainties as precedents may not have formed yet, especially when the secured asset involves claims, such as leasehold rights under a lease agreement. According to the BSA, upon notifying the debtor about enforcement reasons, the debtor is prohibited from settling any debts with the security provider. Instead, any payments must be directed to the security receiver from the notice receipt date. 

BSA over real properties 

The enforcement of a BSA over real properties will align with the enforcement procedures for BSAs over other rights/assets. Though it is not common, if real property is registered under both a mortgage and a BSA, the registration completed first takes precedence in enforcement. Additionally, if a property is registered with both a mortgage and a BSA, the mortgagee has the right to enforce the mortgage using the BSA’s enforcement procedures. 

Assignment 

Under an absolute assignment, the debtor will have to make payment or perform their obligation to the lender (assignee). In a conditional assignment, while the lender will only be an ordinary creditor in the same rank as other unsecured creditors, the enforcement thereof gives the lender the right to substitute itself or its designated person as a party to the agreement.   

General Limitations on Enforceability 

The enforceability of securities is subject to limitations imposed by general laws, including those related to bankruptcy, insolvency, reorganisation or moratorium. Specifically, under the Bankruptcy Act, B.E. 2483 (1940) (as amended) (the “Bankruptcy Act”), two main provisions impact this: (i) an automatic stay halts civil actions, arbitration submissions, or bankruptcy proceedings, and (ii) a moratorium on creditors’ rights (including the right to enforce security without court permission) takes effect once a court accepts a business rehabilitation petition. This moratorium remains until either the business rehabilitation plan is completed or dismissed, or the receivership order is cancelled.  

In the Thai market, downstream and upstream guarantees are common in acquisition finance transactions. Typically, a guarantor will be liable for the secondary obligation. However, if the guarantor is a juristic person, it may agree to be liable as a joint debtor with the borrower. Despite this, the guarantor still enjoys the rights and protections provided under Thai guarantee law, as discussed in 6.2 Restrictions. In practice, lenders often request guarantees at the joint-debtor level whenever possible. 

Generally, there is no prohibition or restriction on the upstream guarantees in Thailand. Thai law is quite flexible when it comes to corporate benefit tests and financial assistance restrictions.  

However, guarantee under Thai law is a secondary obligation provided to support a borrower’s primary obligation. In principle, a guarantor cannot be bound as a joint debtor. The law intends to protect the guarantor, providing certain rights to the guarantor, including the right to demand that the properties be enforced prior to their enforcement or the requirement for notification. Due to this intention of the law and the nature of a secondary obligation, certain modification to the primary obligation may release the guarantor from their obligation. Nevertheless, a corporation can agree to be liable as a joint debtor (to the extent permitted by the law), in which case their level of protection will be more limited.  

In addition to the above, corporate loan guarantees, including for acquisition finance, typically cover future or specific conditions. They must clearly specify their purpose, nature, maximum liability and duration, setting a legal limit to prevent indefinite liabilities. In the case of default, guarantors need written notice within 60 days, or they are released from further liabilities for interest after such 60-day period. Post-debt acceleration, guarantors can opt to settle in full or continue with the original payment schedule. Moreover, any extension of payment deadlines requires the guarantor’s agreement to keep the guarantee valid. Any deviation from these requirements could render a guarantee void, or the deviation itself may be deemed invalid. 

Please refer to our Trends and Developments article for detailed information about this topic.

Note that, the guarantor, if a foreigner, will be under the restriction to obtain a licence prior to undertaking the guarantee according to the FBA (please see 5.6 Other Restrictions). 

Under Thai law, there is no requirement to charge fees for guarantees. However, providing a guarantee without a fee may have tax and accounting implications. It is advisable to consult a tax advisor or accounting firm to address these potential issues. 

Thailand does not recognise the concept of equitable subordination. 

Generally, laws provide claw-back rights for lenders when borrowers dishonestly act to avoid debt repayment. Given that acquisition finance deals are typically bona fide and legitimate transactions, the risk of claw-back in this context is remote. 

Under the CCC, a creditor may request the court to revoke a transaction if the borrower conducts it knowing it would prejudice the creditor, unless the third party involved was unaware of such prejudice and provided consideration for the transaction. 

Additionally, under the Bankruptcy Act, there is a presumption that the borrower and the third party knew the transaction would harm the creditor if it occurred within one year before or after starting bankruptcy proceedings, or if the transaction involved inadequate compensation. The timeframe to petition for nullification of a fraudulent act is within one year after the creditor becomes aware of the cause for nullification, or within ten years from the act’s occurrence. 

Furthermore, if within three months before or after bankruptcy proceedings begin, the borrower favours one creditor over others, the Official Receiver may request the court to revoke such action. 

Claw-back may occur if assets are improperly sold, such as in transactions without consideration or significantly below their actual value, potentially harming the seller’s creditors. However, if the acquirer or lender acts in good faith according to the law, they are generally protected from the claw-back of the seller. 

In Thailand, stamp duty is applicable to certain documents as provided under the Revenue Code of Thailand. The common financing transactions subject to stamp duty include the following. 

• Loan agreements: stamp duty of THB1 (approximately USD0.028) for every THB2,000 (approximately USD55) of the loan or its fraction, but not exceeding THB10,000 (approximately USD275.25). 
• Guarantee agreements: nominal stamp duty of up to THB10 (approximately USD0.28). 
• Pledge agreements: ad valorem stamp duty of THB1 for every THB2,000 of the secured loan, without a maximum cap on the stamp amount. However, if the principal loan agreement has already been stamped, additional stamp duties are not required for the pledge. In practice, since there is no cap on the stamp duty for a pledge agreement, it is common for a loan agreement executed abroad to be couriered to Thailand to affix stamp duties and benefit from the capped rate of the loan agreement. 
• Duplicates: stamp duty of THB5 (approximately USD0.14) for a duplicate of the documents required to be affixed with more than THB5 in stamp duties. 
• Power of attorney: each appointment of an agent (ie, facility agent or security agent), whether under an intercreditor agreement or power of attorney, is subject to a maximum stamp duty of THB30 (approximately USD0.83) per agent for each principal. 

Stamp duties must be affixed within 30 days if the document is executed abroad and enters Thailand, or within 15 days for documents executed within Thailand. Penalties apply for late stamping, and unstamped dutiable instruments cannot be admitted as evidence in Thai courts. 

Furthermore, different types of security may incur additional registration fees payable to the relevant government body, as set out below.  

• Mortgage registration: for land and/or building mortgages, the fee is 1% of the mortgage amount, not to exceed THB200,000 (approximately USD5,504.71). 
• Machinery mortgage registration: the fee is 0.1% of the mortgage amount, capped at THB120,000. 
• Business security agreement registration: the fee is 0.1% of the secured amount, capped at THB1,000, except for security over land, where the fee equals the land mortgage registration fee. 

Generally, interest paid to financial institutions in Thailand is not subject to withholding tax. Nonetheless, any payments made to non-tax resident lenders, including interest, other fees, expenses, charges and penalties, are subject to a withholding tax at a rate of 15%. To prevent double taxation, the withholding tax paid may be reduced, waived, or used as a tax credit, depending on any relevant double tax agreement that Thailand may have with the lender’s country of origin.  

In practice, lenders still require the inclusion of a tax gross-up provision in the loan agreement even when they are not subject to withholding tax. This becomes a negotiation point as strong borrowers may request the removal of such a requirement. A compromise is sometimes reached by retaining the tax gross-up provision with specific reservations for the borrower, such as when the tax liability results from a change in the lender. 

In Thailand, there are no thin-capitalisation rules. However, the Revenue Department of Thailand is contemplating the introduction of regulations that would define an appropriate debt-to-equity ratio for taxation purposes. Furthermore, entities seeking to benefit from investment incentives offered by the Board of Investment (BOI) must adhere to specific financial criteria. According to the BOI, newly established projects must maintain a debt-to-equity ratio that does not exceed 3:1 to qualify for project approval. 

In Thailand, certain industries are heavily regulated, each with its own set of rules unique to its respective sector. Examples of regulated targets include the following. 

• Financial institutions: banks, insurance companies, securities firms and other financial entities are subject to regulation by the BOT and the Securities and Exchange Commission (SEC). 
• Insurance companies: insurance companies are regulated by the Office of Insurance Commission (OIC). 
• Telecommunications companies: telecommunications service providers, internet service providers and the broadcasting sector are regulated by the National Broadcasting and Telecommunications Commission (NBTC) to ensure fair competition and consumer protection. 
• Energy sector entities: power generation companies, distributors and energy producers are subject to regulation by the Energy Regulatory Commission (ERC) to promote efficiency, sustainability and fair pricing in the energy market. 
• Healthcare providers: hospitals, clinics, pharmacies and medical practitioners are regulated by the Ministry of Public Health (MOPH) to ensure compliance with healthcare standards and patient safety regulations. 

In addition to specific rules for certain heavily regulated businesses, there are also general rules governing competition law under the Trade Competition Act B.E. 2560 (2017) (as may be amended) (TCA) regulated by the Trade Competition Commission of Thailand (TCCT). The TCA handles general competition rules, including cartel requirements, pre-merger and post-merger requirements, and market domination requirements.  

Effects on Transactions 

When the target operates within a regulated industry, it can influence the terms of the acquisition finance. For instance, securing necessary regulatory approvals may be stipulated as a condition precedent. Some industries have their own merger control regulations, such as those enforced by the NBTC or the ERC, which must be considered during the transaction process.  

Report of the Acquisition or Disposition of Securities and Mandatory Tender Offer

When acquiring or disposing of shares that surpass each 5% threshold of the total voting rights in a listed company, the acquiring party must disclose this information promptly ‒ within three business days after the event ‒ by submitting a report to the SEC. 

This report should detail the transaction, including the bidder’s name, any concert parties involved, the type and quantity of securities held, the acquisition date and method, and the highest price paid for these securities within the previous 90 days. 

Additionally, under tender offer regulations, an acquirer must conduct a mandatory tender offer if the acquisition reaches thresholds of 25%, 50% or 75% of a target company’s total voting rights (the “Required Threshold”). The acquirer must: 

• submit an announcement of their intention to make a tender offer, along with the report on securities acquisition or disposition, to the SEC within one business day after reaching any of the aforementioned thresholds; and
• provide the SEC with the tender offer form within seven business days after submitting the announcement. 

Furthermore, the SEC Act stipulates that in determining the Required Threshold, securities held by the bidder’s related persons, such as a spouse or minor, an individual holding more than 30% of the bidder’s total voting rights, and persons acting in concert, must also be considered. 

Certain Funds Requirement

Upon reaching a Required Threshold, a bidder is required to submit a tender offer form (Form 247-4) to the SEC, providing detailed information about the transaction. This information includes the source of funds, evidence of such source (which may be a letter from the lender confirming willingness to lend), and a financial status summary of the bidder. Typically, the source of funds for a tender offer comes from financial institutions, given the high costs associated with making a tender offer. 

There are no other issues of note in this jurisdiction.