Fraser & Neave Ltd eyes Vinamilk

According to newswire Bloomberg.com, through its subsidiary in Singapore, F&N is searching for an acquisition targets to bolster its market share in Southeast Asia after its war chest grew to nearly $745 million after the sales of beer assets. Accordingly, Vinamilk, where F&N owns an 11 per cent stake, is considered a potential target.

Lee Meng Tat, F&N’s chief executive officer for non-alcoholic beverages, said that Vietnam’s largest milk producer is an example of what F&N wants in an acquisition: a company with market presence, well-known brands, and a strong distribution network.

Lee stated that the ideal situation to increase F&N’s ownership rate in Vinamilk is an M&A deal. If successful, it will help the company to enhance its competitive capacity with the two largest US soft drink giants in Southeast Asia, PepsiCo Inc. and Coca-Cola Co.

Lee added that if Vinamilk extends its foreign ownership ratio, F&N will follow developments and lay emphasis on the acquisition of sufficient shares.

Southeast Asia is considered a potential market with a total population of 600 million. In addition, it contains the economic group having the fastest development in Asia.

F&N is among the top three soft drinks players in its home country, Singapore, as well as in Thailand and Malaysia, according to Euromonitor International. However, it isn’t ranked among the top five in Vietnam, Indonesia, and the Philippines, where the company is looking to grow.

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Regarding Charoen Sirivadhanabhakdi, the Thai billionaire has expressed interest in Vietnam. In late 2015, Charoen Sirivadhanabhakdi’s TCC Group, the main investor in Berli Jucker PCL (BJC), completed the purchase of Metro Cash & Carry Vietnam for €655 million ($879 million). The purchase is part of BJC’s plans to become a leading regional player covering the entire value chain and to position itself for the ASEAN Economic Community (AEC).

Earlier in 2013, BJC bought the Family Mart convenience store chain, then belonging to Phu Thai Group and Japanese company Family Mart, and changed its name to B’s Mart. BJC now has 123 B’s Marts in Vietnam.