Feb 16, 2024,09:08pm EST
CP Axtra, the retail division of billionaire Dhanin Chearavanont’s Charoen Pokphand Group, is set to merge with CP Group’s Ek-Chai Distribution in a move aimed at streamlining Thailand’s largest conglomerate’s retail operations and positioning for future growth opportunities.
According to a regulatory filing on Wednesday, CP Axtra will acquire Ek-Chai Distribution, which operates Lotus’s retail chain in Thailand, for 7.7 billion baht ($215 million).
The consolidation of CP Axtra’s network of over 160 Makro stores across nine countries with Ek-Chai Distribution’s 2,500 Lotus’s locations in Thailand and Malaysia is anticipated to enhance the group’s operational efficiency.
Rakpong Chaisuparakul, a strategist at KGI Securities (Thailand), commented that while the restructuring is expected to yield benefits in terms of efficiency and flexibility, tangible synergies may take time to materialize.
As part of the restructuring, CP Axtra will merge with Ek-Chai to form a new entity that will eventually replace CP Axtra’s listing status on the Thai stock exchange. Lotus’s Stores (Thailand), the current owner of Ek-Chai Distribution, will be dissolved upon completion of the merger by the fourth quarter of this year. CP All, the parent company of CP Axtra, is Thailand’s leading convenience store operator.
CP Group, founded in 1921 by Dhanin’s father and uncle, is a global giant in animal feed and livestock production. With a net worth of $34 billion, Dhanin and his brothers rank among Thailand’s wealthiest individuals.
Dhanin, who received the Malcolm S. Forbes Lifetime Achievement Award at the Forbes Global CEO Conference in September 2023, served as chairman of CP Group for 48 years before stepping down in 2017. His sons, Soopakij and Suphachai, now hold key leadership positions in the company. Over the years, CP Group has diversified its portfolio into various sectors including retail, telecommunications, finance, pharmaceuticals, real estate, automotive, and e-commerce, with investments in prominent entities such as Ping An, CITIC, and True Corp.