Foreigners buy into leading Vietnamese companies to enter market

  • ngày 08/12/2018

Buying into Vietnamese corporations is a way some foreign investors join Vietnam’s industries. The corporations they target are mostly leaders in their fields.

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Vinamilk (VNM), Binh Minh Plastics (BMP), Sabeco (SAB) and Hau Giang Pharmacy (DHG) are such corporations, listed in the top 30 shares (VN30) of the Vietnamese market.

1. At Vinamilk, SCIC has been the biggest shareholder for many years. After divestments and ESOP issuance campaigns, SCIC’s ownership ratio has dropped to 36 percent.

Asked if SCIC would continue divesting VNM shares, an official said the divestment will be carried out step by step, depending on market demand. In general, the state still wants to protect its veto right in large corporations.

Buying into Vietnamese corporations is a way some foreign investors join Vietnam’s industries. The corporations they target are mostly leaders in their fields.

For F&N, the investment in VNM in 2017 brought it $924 million, or 47 percent of its earnings before interest and taxes (EBIT).

Both F&N and Platinum Victory, another big shareholder, want to buy more VNM shares. PXP Vietnam Asset Management’s Kevin Snowball commented that F&N wants 51 percent of VNM shares.

2. Binh Minh Plastics fell into Thai hands after The Nawaplastic Industry (Saraburi), belonging to SCG, acquired 54 percent of BMP and replaced SCIC to become the new owner.

SCG is a familiar name to Vietnamese. The group has been here for 26 years, during which it became big shareholder of Long Son petrochemistry, Prime Group (tile manufacturing), StarCemt (cement production) and Tin Thanh Packaging.

SCG is pursuing an ambitious plan on investing $5-6 billion in the plastics industry in Vietnam by 2020. Prior to that, it spent $121 million to acquire shares in another seven plastics companies. It only withdrew from Tien Phong Plastics after realizing that there was no opportunity for it to buy more shares to hold a controlling stake.

3. Taiso Pharmaceutical last August wrapped up its campaign of buying more DHG. Holding 34.3 percent of DHG’s charter capital, Taiso is now the second biggest shareholder in DHG, just after SCIC.

Taisho has poured money into other regional markets such as Indonesia and Malaysia, where it has long-term investments. It is highly possible that the group will also have a long-term investment in Vietnam. With the M&A of DHG, Taisho can complete entry into the entire Southeast Asian market.

4. Sabeco, the largest Vietnamese brewer, has been taken over by ThaiBev. Big changes in its structure have been made since then. 

It has a Thai CEO and three Thai members on the board of management. It is also planning to restructure production, distribution, marketing, and supply chain and logistics. These moves aim to help it increase market share.

Source: Vietnamnet

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