BANGKOK -- Thai retail giant Central Group will acquire a controlling stake in sector peer Siam Future Development for 13.3 billion baht ($400 million) as part of its effort to further strengthen its presence in the country's retail market.

Siam Future Development runs 18 projects, including Mega Bangna, which is widely seen as the top mall in suburban Bangkok. The mall started operating in 2012, with IKEA's first outlet in the nation as a key tenant. The company reported consolidated revenue of 972 million baht in the first half, up 32% from the same period in the previous year. Its net profit increased by 20% to 785 million baht.

The acquisition is in line with the medium-term expansion plan of Central Pattana, the group's mall operating arm. The company aims for average growth per year of 10% from 2021 to 2025. The mall giant said it would seek M&A opportunities to invest in potential high-growth assets. It also expects to achieve the target through new mixed-use development projects, enhancement of existing shopping malls, and developing new residential projects, hotels and offices.

Central Pattana's revenue grew by 0.1% to 16.5 billion baht in the first half, while its net profit rose 0.87% to 5.1 billion baht. The group operates in over 3,700 locations globally.

Thailand's retail operators are in a predicament amid outbreaks of the delta strain of the coronavirus. Prime Minister Prayuth Chan-ocha's administration has implemented business lockdown measures and a nighttime curfew in affected provinces, including Bangkok, since mid-July. Most parts of shopping malls, except for essentials such as supermarkets, were ordered to close, adversely impacting mall operators' revenue. Investment in the sector peer will support Central Pattana's revenue in this difficult environment.

Central Pattana announced on Wednesday that it had reached a purchase agreement through its subsidiary Central World to buy 1.11 billion shares, which accounts for a 52.15% stake in Siam Future Development. The transaction will take place on Aug. 30.

Of that, 30.36% will come from the sector peer's largest shareholder, Major Cineplex Group. The rest will be sold to Central from a group of major individual shareholders. Each share was priced at 12 baht.

At the Stock Exchange of Thailand, Siam Future Development was trading at 11.7 baht per share on Thursday. When Central Pattana disclosed its intention for the deal on July 5, the share price was already at 11.6 baht, having started going up a few weeks ahead of the disclosure. One share had traded at 7.25 baht on the last day of May.

After the completion of the transaction, Central is expected to make a tender offer for the remaining shares at 12 baht each. When buying a listed entity in Thailand, a company is mandated to make a tender offer if its stake would surpass 25%, 50% and 75% as a result of the bid. If Central were to take full control of Siam Future Development, it would need an additional 12 billion baht ($370 million) to purchase the remaining shares.

Central has not made clear if it will fully take Siam Future Development. At the Stock Exchange of Thailand, companies above market capitalization of 300 million baht can remain listed until their floating shares go less than 20% of their common stock.