July 6, 2012

CP shows interest in acquiring foreign firms

Thai agribusiness conglomerate, Charoen Pokphand (CP) Group, has shown interest in taking over several foreign companies, including possible investments in the US' Smithfield Foods and the French retail giant, Carrefour.

Chairman Dhanin Chearavanont said the economic downturn in Europe and the US has depressed share prices for many companies to levels very attractive for outside investors.

"The share prices of stocks in the European markets are cheaper than in the past," he told a forum hosted by Prachachart Turakij newspaper.

Dhanin said the euro-zone crisis is far from over, and weak economic conditions in Europe have opened the door for financially strong Asian companies to expand on the continent.

He downplayed on whether a European acquisition will be completed soon, saying time is needed for feasibility studies.

Dhanin called on the government to offer greater support for small and medium-sized Thai enterprises to invest abroad, particularly in China.

He expressed confidence that China, currently the second-largest economy in the world, will shortly overtake the US for the top spot.

Property-related industries, services and agriculture are among the most attractive sectors for investors in China, said Dhanin, adding that the Chinese government is expected to take additional action to boost its economy.

"I recommend the government keep an eye on the Chinese government's policies," he said.

"If there are any policies that are interesting and useful for small Thai businesses, then the Thai government should consider issuing similar policies to support overseas investment."

CP Group expressed interest two years ago in bidding for Carrefour assets when the European retailer announced plans to divest itself of its hypermarket chain in Thailand, Singapore and Malaysia.

Big C, an affiliate of Casino, ultimately won the bidding and acquired Carrefour's 44 branches in Thailand.

Teerasak Urunanon, an executive vice-president of the CP flagship Charoen Pokphand Foods, declined to identify the firms the group was considering for investment but said any target would have to offer synergies with the group's existing businesses.

Earlier this year, Adirek Sripratak, the president and chief executive of Charoen Pokphand Foods (CPF), said his company was in talks with three international food processors, with a possible acquisition to be completed by year-end.

CPF shares closed yesterday on the Stock Exchange of Thailand at THB34.75 (US$1.10), down US$0.02, in heavy trade worth THB4.06 billion (US$129 million).