Thai firm F&N Dairy Investments seeks to raise stake in Vinamilk

Thai firm F&N Dairy Investments seeks to raise a stake in Vinamilk

F&N Dairy Investments, linked to Thai billionaire Charoen Sirivadhanabhakdi, has registered to purchase nearly 21 million additional shares of Vinamilk, aiming to increase its stake in the Vietnamese dairy giant to 18.69 per cent.

The proposed acquisition, announced by Vinamilk, is scheduled to take place between January 17 and February 14 via market transactions and order matching.

F&N Dairy Investments is a subsidiary of Fraser & Neave, the Singapore-based beverage conglomerate acquired by Charoen's TCC Group in 2013. The group first entered Vinamilk in 2005, during the company’s privatisation, securing an initial 5 per cent stake.

Interest in Vinamilk intensified following the Vietnamese government’s divestment of shares in 2017, which drew significant attention to the company. By the end of 2023, F&N had accumulated a 20.4 per cent stake in Vinamilk through its subsidiaries F&N Dairy Investments and F&N Bev Manufacturing.

Currently, F&N Dairy Investments alone holds 369.7 million shares, equivalent to 17.69 per cent of Vinamilk’s charter capital. A successful transaction would raise this figure to 18.69 per cent.

The latest move comes shortly after F&N’s unsuccessful attempt to acquire additional shares late last year, citing unfavourable market conditions. This follows a pattern in recent years, with F&N frequently registering to purchase shares but facing challenges in executing the transactions. Despite these setbacks, the group has remained steadfast in its efforts, highlighting its confidence in Vinamilk’s long-term value.

While the financial impact of Vinamilk on Fraser & Neave’s broader performance remains undisclosed due to its classification as an associated company, the Thai billionaire continues to benefit from the dairy producer’s substantial dividend payouts.

Vinamilk has maintained a cash dividend payout ratio between 38.5 per cent and 60 per cent annually, resulting in consistent returns for its shareholders. To date, F&N and its affiliates have collected a cumulative dividend of approximately $604 million, including the second distribution round for 2024.

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