An Under the Radar Acquisition to Layout Fundamental in Fintech Business

CP All Public Company Limited (SET: CPALL) made one announcement on August 28 that went under the market’s radar due to the size of transactions, compared to how big the retail giant is. However, this acquisition could prove to be more valuable than meets the eye.

On August 28, CPALL announced that it entered into a connected transaction in relation to the investment in the newly issued ordinary shares of Ascend Commerce Company Limited in the proportion not exceeding 19 percent of the total registered capital after capital increase, which accounted for value not exceeding 704 million baht.

Ascend Commerce has ADCG as a major shareholder. ADCG is indirectly owned by CP Group, holding 59.4 percent of the total shares, and CPG is also a major indirect shareholder of CPALL. Meanwhile, Mr. Suphachai Chearavanont, CPALL’s director, also indirectly owns 17.3 percent of ADGC’ shares.

The Commerce arm is a part of Ascend Group, which has Ascend Money to E-Wallet and nano finance and Ascend’s Data Centers & Cloud Service to operate, well, data center and cloud service.

An acquisition of 19% stake worth 704 million baht from a company worth more than half a trillion would surely gain less attraction from the market. However, some see that this could be the first step for the Thai conglomerate to become a fintech player in the market.

The story begins with the preparation to establish Thailand’s first virtual bank that the Bank of Thailand will only give three licenses to most suitable operators that meet requirements. Big names in the market are banding together for this new challenge, which could lead to a new business growth. CP Group has long since been allied with Ant Group’s Alibaba through Ascend Money, who operates the notable E-Wallet in Thailand; TrueMoney.

Meanwhile, Advanced Info Service (SET: ADVANC), Gulf Energy Development (SET: GULF) and Krungthai Bank (SET: KTB) have joined in a partnership to compete for the license as well.


Some of the market watchers speculate that this move could also be a preparation for the newly formed government’s measure of handing out 10,000 baht through digital wallet to boost consumption and Thailand’s economy as a whole

The 19% stake acquisition could mark CPALL’s first step to build its power in the fin tech business as CP Group is focusing on the virtual bank and also wanting to expand its retail base through CPALL’s 7Eleven and others.

Imagine CPALL took control of those three businesses while sitting on a large amount of user data it acquired from operating 7Eleven and TrueMoney. A nano finance would be much easier through 7Eleven around the country, while there is more than 51 million of user data from True Corporation (SET: TRUE) after the merger with DTAC.

A 19% now could possibly lead to market domination later.