Key food and beverage players acquiring new shares

Key food and beverage players acquiring new shares, Photo: Shutterstock

Two weeks ago, AIG Asia Ingredients Corporation (AIG) announced that Marubeni Growth Capital Asia Pte. Ltd. (MGCA) has become a strategic partner via the acquisition of a significant minority interest in the company.

Following the deal, MGCA will continue to focus on Southeast Asia, driven by key underlying consumer trends. It remains committed to creating value with its investee companies within the sector.

Bharat Sarma, president and senior managing director of MGCA, said, “Food and functional ingredients play an increasingly critical role in the food sector and catering to consumer trends and changing lifestyles. AIG is strategically transforming along multiple dimensions, including innovation, solution development, natural foods, and branded packaged food products.”

Founded in 2001, AIG supplies and manufactures food ingredients and packaged food products in Vietnam, and has made significant investments in innovation centres and food ingredient manufacturing facilities.

MGCA, a wholly owned Singapore-based subsidiary of Marubeni Corporation, is a platform focused on investing in the consumer sector in Southeast Asia.

Elsewhere, food producer KIDO Group has spent over $40 million to acquire Tho Phat Food Processing Company.

In April, KIDO announced that the group had scooped up a 25 per cent stake in Tho Phat. At the end of September, it increased the ownership ratio to 51 per cent, equalling an investment value of $33.3 million. The following month, the food producer poured an additional $11 million into Tho Phat to raise its ownership to 68 per cent.

KIDO’s CEO Tran Le Nguyen said, “Tho Phat will be an important piece of KIDO’s strategy of expanding its cake segment. Alongside its member companies, we aim to become one of Vietnam’s foremost food suppliers and expand into overseas markets.”

Meanwhile, Nafoods Group JSC has taken over 99.9 per cent of the assets of vegetable processor Nghe An Food Products JSC for approximately $12.75 million.

“Numerous signals show that, besides the local consumption market, exports will be a major driver for the food processing industry and M&A activities in Vietnam. Firstly, free trade agreements between Vietnam and partners are gradually phasing out export tax from 2024 or 2025,” said Phong Quach, head of consulting at Ipsos Strategy3 Vietnam.

“Secondly, key players now acquire a significant share in raw materials supply upstream sector, which means they can manage raw materials in a way that can comply with strict standard of importing countries. Lastly, Vietnam’s demand for processed food products is still small compared to the global average, indicating that opportunities abound,” Quach added.

Dealmaking is not only vibrant in the food processing segment, but also in beverages. Growtheum Capital Partners, a Singaporean private equity firm, has successfully completed two-tranche investment totalling approximately $100 million in International Dairy Products JSC (IDP).

The investment included a secondary share tranche and a private placement tranche, in which Growtheum acquired an aggregate of 12.6 per cent stake in IDP.

Earlier in 2023, Swire Coca-Cola announced completion of its acquisition of Coca-Cola Beverages Vietnam Ltd., a bottling subsidiary.

According to Colliers, Vietnam has emerged as a bright investment destination for the food and beverage industry compared to neighbouring countries in Southeast Asia. Expenditure on food services is also at a high level here, with people spending more than $360 per month on average, it said.

MMarket survey company Mordor Intelligence forecasts that the industry in Vietnam will achieve a compound annual growth rate of up to 8.65 per cent between 2021 and 2026.

Big deals making a mark within industrial real estate The trend of shifting supply chains to key destinations, including Vietnam, has provided an opportunity for the country to attract foreign capital flows and become a focal point of the industrial real estate sector.

Signs of M&A flourish in healthcare arena While mergers and acquisitions in Vietnam’s healthcare sector show some signs of flourishing, the sector needs more drivers to grow.

Expansion potential despite downturn in real estate M&As Pressured by the global downturn, in the domestic market, there were fewer merger and acquisition (M&A) transactions in Vietnam’s real estate in 2023, with a lower total value than in 2022.

Vietnam retaining potential for M&A transactions Ahead of the Global M&A Partners (GMAP) conference this week, co-chairmen Ivan Alver and Frédéric de Boer shared their views on the role of the Vietnamese market in GMAP’s development strategy with VIR’s Bich Ngoc.

Domestic firms in Vietnam intensify dealmaking action Merger and acquisition deals are mainly dominated by foreign players in Vietnam. However, more local firms have stepped up their dealmaking activities. Binh Le Vandekerckove, CEO and head of M&A of ASART, shared with VIR’s Thanh Van the current trends.