Japan’s Sojitz Corporation has become the newest aggressive buyer in Vietnam’s mergers and acquisitions scene, with a planned stake acquisition in PAN Group, reflecting Japanese investors’ quest to take over major Vietnamese companies before their Asian peers can.
|Sojitz continues its M&A spending spree in Vietnam, source: cafef.vn |
PAN Group last week revealed its plan to offload 14.86 million shares, equal to an 11 per cent stake, to Sojitz Corporation. If the plan gets the green light from shareholders, Sojitz will become a major shareholder and strategic partner of PAN Group.
Under the plan, PAN Group proposed a minimum selling price of VND55,000 ($2.43) a share. The transaction is expected to be completed in either the third or the fourth quarter. Established in 1998, PAN Group has become one of the leading agricultural companies in Vietnam, with total assets of VND7.6 trillion ($336.3 million).
Meanwhile, Sojitz has established a strong presence in Vietnam’s farming and food business. It started with Japan Vietnam Fertilizer Company in 1998. Interflour Vietnam Limited, in which Sojitz has an investment stake, is also engaged in the import of food and feed as well as the flour milling business.
Sojitz has been on an acquisition spree in Vietnam in recent years. In June, Sojitz completed the acquisition of a 95.24 per cent stake in Saigon Paper Corporation for $91.2 million, known as the biggest deal in the domestic paper industry so far. The latter is one of Vietnam’s largest paper manufacturers, with an annual output of 40,000 tonnes of household paper and 230,000 tonnes of industrial paper.
Last December, Sojitz Planet, the plastics division of Sojitz, entered into a strategic partnership with Vietnamese plastics producer Rang Dong Plastic JSC when Rang Dong sold a 20 per cent stake in its subsidiary Rang Dong Long An Plastic JSC, in the southern province of Long An, to Sojitz Planet.
Besides, Sojitz also penetrated into Vietnam’s retail market in 2015 by teaming up with Ministop Co., Ltd. to expand the latter’s convenience store business. It also joined forces with New Land Co., Ltd. and other partners to build a four-temperature cold-chain logistics business in Vietnam.
Sojitz’s acquisition spree reflects the growing enthusiasm among Japanese investors to enter the domestic market via mergers and acquisitions (M&A). According to Masataka Sam Yoshida, managing director of Recof Corporation, which provides services in the entire process of M&A transactions, Japanese investors are aware of the competition for Vietnamese companies among Asian buyers. This sense of urgency has prompted Japanese investors to act more quickly and offer better prices in recent M&A deals.
“Japanese corporations believe that they need to invest more in the ASEAN region, and Vietnam is one of the most attractive destinations,” Yoshida said. “They’re also aware that they’re competing against buyers from South Korea, Singapore, and Thailand.”