Siam Global House Plc, a joint venture between SCG Distribution Ltd and Global House International, has taken a 40% share in Vientiane-listed Souvanny Home Centre to expand its building materials and home decor retail business.
Witoon Suriyawanakul, chief executive of Siam Global House, said the move was part of plans to expand in Asean, focusing on Cambodia, Laos, Myanmar and Vietnam.
"We're aiming at these countries and in talks with several companies in the region," he said.
"However, the deal with Souvanny was the first one sealed."
Mr Witoon said his company was also in talks to merge with companies in Myanmar, but deals had not been concluded due to complicated investment laws and regulations.
As the minor shareholder, Siam Global House will leave the running of the business in Laos to Souvanny, while the Thai company will provide goods, software and facilities.
Souvanny has filed an initial public offering (IPO) for 25 million shares with a par value of 2,000 kip on the Lao Securities Exchange (LSX) in order to launch new branches and increase its working capital.
Souvanny chief executive Waddana Soukbandith said his company planned to raise funds through the LSX to open three branches and to use as working capital as it faces competition from the imminent Asean Economic Community (AEC).
After the IPO, the company will have 610 billion kip (2.72 billion baht) in paid-up capital, up from 280 billion now.
"The money raised through the capital market will be used to open branches in Vientiane, Pakse and Paksun. The rest will be used as working capital to support development of the business," Mr Waddana said.
"We believe the AEC will attract industrial and household investment, helping the Laotian economy to grow significantly."
Somphob Sakpunpanom, chief executive of APM (Lao) Securities Co, Souvanny's financial adviser, said the company had turned in strong performances in recent years, with revenue of 264 billion kip for a net profit of 14.2 billion in 2013 and revenue of 311 billion for a net profit of 20.5 billion last year.
"The company has a bright future ahead. It has the potential to grow immensely, as it will have a greater reputation in the international market once listed on the LSX," he said.
"Its capital will be stronger, which will help the company to have new branches, product lines, target markets and distribution channels."