F&N’s subsidiary undeterred in appetite for Vinamilk shares

July 20, 2017 | 10:39

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In spite of numerous failures, Singapore-based F&N Dairy Investments Pte., Ltd., a 100 per cent-owned subsidiary of Fraser & Neave Ltd. (F&N), has expressed its determination to own more stakes in Vietnam Dairy Products Joint Stock Company (Vinamilk) via registering to buy an additional 14.5 million shares.

F&N views Vinamilk as the perfect target for M&A

According to newswire Dantri, the transaction is expected to take place between July 24 and August 22. If successful, F&N Dairy Investments Pte., Ltd. will increase its holdings in Vinamilk from 16.04 to 17.04 per cent, equalling 247 million shares.

Previously, F&N Dairy Investments Pte., Ltd. expressed its ambition to acquire 21.77 million Vinamilk shares, however, the company subsequently had to withdraw the offer due to unfavourable market conditions.

Notably, the company registered to purchase 21.77 million shares during February 6-March 7, but only picked up 4.11 million, lifting its Vinamilk shares to 218.8 million, an estimated 15.07 per cent of the total shares.

On May 11, the company completed the purchase of five million shares in Vinamilk to increase its holding to 16.04 per cent, equivalent to 232.7 million shares.

F&N Dairy Investment Pte., Ltd. and F&N Beverages Manufacturing Sdn., Bhd., another 100 per cent-owned subsidiary of F&N, spent VND11.3 trillion ($499.56 million) on buying 78.38 million shares, equalling a 5.4 per cent stake, in Vinamilk.

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.

He stated that the ideal solution to increasing F&N’s ownership rate in Vinamilk would be an M&A deal. If successful, it would help the company to enhance its competitive capacity against the two largest US soft drink giants in Southeast Asia, PepsiCo Inc. and Coca-Cola Co.

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