Thailand's cross-border mergers and acquisitions (M&As) will expand further next year, with neighbouring countries continuing to be the major destinations for local companies, says Kasikornbank (KBank).
The value of outbound M&A deals by Thai companies rose to 175 billion baht or 1.3% of GDP on average from 2012-14 from 0.15% from 2009-11, with the ratio expected to climb higher this year and next, executive vice-president Chongrak Rattanapian said.
Thailand's cross-border M&As have concentrated on Cambodia, Laos, Myanmar and Vietnam, expected to be the new bright spots of the world.
Interestingly, local medium-sized enterprises are keenly looking for M&A opportunities abroad to expand their business in the region to prepare for the advent of the Asean Economic Community (AEC).
Previously, only large companies jumped on the outbound M&A bandwagon.
Mr Chongrak said outbound M&As had high growth potential, particularly in the sectors of renewable energy, food and beverage, logistics and transport, information technology, hotels and tourism, trading and health care.
"Consumer products and services is the sector with greater outbound M&A opportunities in the region than any other," he said.
Asia-Pacific countries are the most preferred M&A destinations for Thai companies, as they are not far from Thailand and often have similar cultures, he said, adding that the region was also the most popular for M&As globally.
Over the next three years, Asean economic growth is expected to average 4.6% to 4.9% a year, with strong growth momentum clustering in Myanmar and the three Indochinese nations at an average expansion rate of 7%.
In the same period, Thailand is likely to register only 3.2% to 3.6% growth.
Consumers in these four countries will see urban spending power jump from 6.3 trillion baht in 2013 to 8.05 trillion in 2020 for average annual growth of 4%, Mr Chongrak said.
Cross-border M&As in Thailand are also expected to flourish as foreign businesses build up their local production bases to tap the AEC, he added.