Global | Publication | abril 2023
In Thailand, the Energy Regulatory Commission of Thailand (ERC) has issued the following specific regulations for merger control and competition promotion in the energy sector (i.e. electricity and natural gas businesses), with the aim of regulating and overseeing mergers and acquisitions in the energy industry and prevent any potential anti-competitive effects that may arise from such transactions.
The main purpose of issuing these new rules is to modernise the competition and merger control regime in the energy sector.
In light of the recent update to the Mergers and Cross-Shareholdings Regulation, regulated activities have been redefined to be compatible with the recent trends in the Thai market (Regulated Merger Activities). For example, the purchase or acquisition of shares, warrants, or other securities that can be converted into shares with the intention of obtaining managerial control over the business of another business operator, including an indirect share acquisition of shares at the non-licensed parent entity, will be regulated. Other Regulated Merger Activities include mergers, amalgamations, asset acquisitions, or cross-shareholdings.
The new requirements also apply to Regulated Mergers Activities carried out by the licensee’s controlling companies, parent companies, affiliates or subsidiaries.
The Mergers and Cross-Shareholdings Regulation has introduced a more complex approval process than the one previously adopted by the ERC. The licensee is required to file for pre-approval from the ERC for any Regulated Merger Activities at least 60 days in advance, unless the licensee can demonstrate compliance with certain conditions specified in the Mergers and Cross-Shareholdings Regulation and is eligible to submit a pre-merger clarification report instead of seeking ERC pre-approval.
The ERC has implemented a two-step consideration process (replacing the previous single-step process) that involves supplementary evaluation if the licensee is perceived not to meet specific criteria. After submitting the requisite documents, the ERC will evaluate whether the merger will trigger or lead to a monopoly, limitation, and/or restriction of the competition in the energy market, or whether it will affect power sustainability or any other public interest. If such an impact is identified, the licensee and/or business operator must submit a merger impact assessment report to the ERC for further consideration. The ERC may establish a sub-committee or an independent consultant to evaluate the impact of the Regulated Merger Activities. The committee will then make a decision on the application.
Under the new Market Definition Regulation, the concept of market definition has been introduced, which sets out the criteria and procedures for the ERC to define and delineate the market scope in the energy sector. This will assist the ERC in precisely defining the market for further implementation of measures or as part of the consideration process for granting approval for conducting Regulated Merger Activity by business operators.
In determining the market definition and scope, the ERC will prioritise and focus on each licence type. The geographical factor and market competitive conditions will subsequently be considered by the ERC. If applicable, the ERC can also rely on the possibility of replacement energy services in terms of details, prices, and utilisation pursuant to economic principles.
Periodic reviews of market definitions and relevant energy service markets will be conducted by the ERC, considering technological advancements, competitive conditions, and input from public hearings.
The Licence Transfer Regulation adds a clear definition of what constitutes a transfer of a licence, and sets out the concepts and processes for granting approval of licence transfers. The ERC has also transitioned the consideration process from a single-step process to a two-step process. The ERC must always take into account whether the licence transfer will trigger or lead to monopolisation, limitation, and/or restriction of competition in the relevant market. If it does, the transferor will be required to conduct an impact assessment report and submit it to the ERC for further round of consideration.
The new Market Dominance Regulation empowers the ERC to proactively determine a shortlist of licensees deemed to be "market dominant business operators". The ERC can then implement any necessary and effective measures, which will be customised based on the prevailing market condition, against such licensees to prevent and restrict any action or conduct that could lead to the monopolisation, limitation, or restriction of competition in the energy market.
Under the new Anti-Competition Prevention Regulation, any action or conduct aimed at limiting or restricting competition in the market, including actions or conduct that may lead to a monopoly, whether conducted solely by the business operator or in cooperation with a party that is not the licensee or business operator in the energy market, is prohibited. In addition, the licensee is obliged to promptly inform the ERC of any actions or behaviours that exhibit monopolistic practices, or limit or restrict competition.
This regulation also establishes the right of the licensee or business operator to voluntarily monitor any action or conduct that tends to monopolise, limit, or restrict competition in the market.
Publication
On September 18, 2024, the "Decree amending the list that sets forth goods whose import and export are subject to regulation by the Ministry of Energy" (the "Decree") was published in the Federal Official Gazette.
Publication
On September 18, 2024, the "Decree amending the list that sets forth goods whose import and export are subject to regulation by the Ministry of Energy" (the "Decree") was published in the Federal Official Gazette.
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