MWG to spend $110 million acquiring electronics and pharmaceutical store chains

August 04, 2017 | 12:03

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Mobile World Investment Corporation (MWG) plans to spend VND2.5 trillion ($110.3 million), five times as much as the initial figure planned for mergers and acquisitions activities this year, to acquire a number of electronics store and pharmaceutical store chains this year, according to newswire Vnexpress.

MWG's planned shopping spree goes over initial expectations

It was announced by MWG chairman cum CEO Nguyen Duc Tai at the press conference held to announce the company’s results in the first six months.

Tai said that MWG will immediately conduct the two acquisitions right after receiving shareholders’ approval.

Tai added that after the acquisition, MWG will keep the brand identity of the electronics store chain for 12-18 months.

Regarding the pharmaceutical store chain, Tai stated that instead of spending two or three years on researching this market to build a new pharmaceutical store chain, MWG will acquire an existing brand and then expand its operations.

MWG expects to purchase 20-40 per cent stakes in other pharmaceutical retailers, and then will gradually increase its holdings to 60 per cent. It prioritises enterprises owning between 10-15 pharmaceutical stores which it will then increase to 500.

Currently, there are 1,527 MWG stores all over Vietnam, including the brands Dien may XANH, The gioi Di dong, and Bach hoa XANH. In the first half only, MWG has opened 272 outlets, with Dien may XANH stores accounting for over a half.

Consumer electronics distribution is the key contributor to MWG’s success. The gioi Di dong stores make up approximately 70 per cent of company sales and account for 38 per cent of its market share.

Regarding the grocery store chain or Bach hoa XANH, at present, the revenue from this chain is quite low, however, MWG still set the target to open 300 new stores in Tan Phu and Binh Tan districts (Ho Chi Minh City) and expects that by 2019, the Bach hoa XANH chain will become MWG’s main source of revenue.

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