Mergers and acquisitions still forging ahead

Despite the political turmoil of the past few months, business within the mergers and acquisitions sector of the economy is expected to ramp up quite significantly during 2014 and beyond.

This is the considered opinion of the respected KPMG consulting company. They suggest that with Thailand’s growing economic scale and its status as the second-largest economy in Southeast Asia (after Indonesia) and the growing purchasing power of its ever-burgeoning middle class, the economic sense of more mergers and acquisitions in the business sector is set to continue apace.

Despite political tensions, there appears to be a strong belief outside Thailand, and especially within the wider Asian region, that the fundamentals for being able to do profitable business over the long term remain strong and buoyant.

KPMG believes that many Western-based businesses are recognizing potentially solid profitable opportunities within Thailand, and are not always just looking at the country as a place where they can lower costs while at the same time employing high-quality labour.

KPMG said the most successful of the overseas businesses which establish themselves in Thailand are those that are able to appeal to the broad range of local consumers. Japanese firms in particular have proven to be very successful in establishing strong positions within Thailand.

KPMG believes the best of the real money-making sectors in Thailand at present are the food, retail, shopping mall, and automotive industries. Within these sectors lies the bulk of middle-class essential and discretionary spending.

The consulting firm believes one of the key factors to maintaining the growth and success of mergers and acquisitions comes via rigorous auditing and accounting practices.

They note that the quality of financial reports in the region have been at far more efficient levels since the 1997 financial crisis, although, as with anything, there are areas which could be better regulated and overseen.

Thailand has been one of the better countries in cooperating with the International Forum of Independent Audit Regulations according to KPMG. Regionally, Thai businesses in general have improved their auditing practices within the ASEAN Audit Regulators Group guidelines.

With some significant mergers and acquisitions KPMG believes not only will the local economy be given added strength, there is also the opportunity for Thai businesses to move out in strength into neighbouring counties, especially the emerging economy of Myanmar.

There is huge potential in Myanmar, a fact not being overlooked by much of the world, but Thailand is in a unique position to exploit some of this, being so well sited geographically to her neighbor.

With most sensible business people taking the medium to long-term view, the future looks good for more mergers and acquisitions to add even greater strength to an already solid economy.