|Top 10 of outstanding M&A deals in 2009-2018 period were announced at the press conference this morning in Hanoi |
In general, in the last ten years, Vietnam saw an increase in both the scale as well as the volume of deals. Notably, in 2009-2010, the largest deal was valued at $100 million, while in 2015-2016 there were numerous billion-dollar deals. However, 2017 saw a new record in deal valuation in the M&A sector as ThaiBev purchased Sabeco’s stakes for $4.8 billion.
Foreign investors were involved in almost all of the largest M&A deals in Vietnam.
Here is the list of Vietnam’s 10 largest M&A deals in 2009-2018 (from The List 100) announced at this morning’s press conference organised by VIR and AVM Vietnam.
ThaiBev and Sabeco
On December 18, Vietnam Beverage (49 per cent owned by ThaiBev), won an auction to acquire 343.6 million shares, equivalent to 53.59 per cent of Sabeco at VND320,000 ($14.09) per share. This brought the deal value to $4.8 billion.
This was the largest share sale in Vietnam so far and possibly the largest in Asia last year.
ThaiBev proceeded with the record deal due to Sabeco’s long history, dominance in the Vietnamese beer market, and high potential. Meanwhile, industry experts ascribed the high price to the “control premium” factor.
After the transaction, Vietnam Beverage officially became Sabeco’s parent company and holds a controlling stake in the company.
GIC Private Limited and Vinhomes
This April, Singaporean sovereign wealth fund GIC announced that it will invest about $1.3 billion in leading Vietnamese property developer Vingroup and related entities for its real estate arm ahead of its market debut, which is slated for the second quarter of this year.
Notably, GIC will purchase ordinary shares and extend a debt-like instrument to the subsidiary of Vingroup, namely Vinhomes, subject to the satisfaction of mandatory regulatory and other conditions. The combined value of the investment and debt instrument is approximately VND29.5 trillion ($1.3 billion).
GIC is a sovereign wealth fund of the Singaporean government. It is one of the largest investment funds in Vietnam. It currently holds a 5 per cent stake in Masan Group, 5 per cent in VietJet, 0.7 per cent in Vinamilk, and 3.5 per cent in FPT. Its total holdings reach a total value of VND15 trillion ($658.6 million).
Central Group and Big C
In April 2016, Thai company Central Group became the new owner of Groupe Casino’s Big C Vietnam after paying $1.14 billion to take over a network of 43 stores and 30 shopping centres of the Big C brand.
According to the press release on the deal, Central Group, in partnership with the Vietnamese Nguyen Kim Group, will continue Big C Vietnam’s strategy, particularly concerning the supply of goods produced in Vietnam for Big C stores.
Central Group is one of the largest family-owned conglomerates in Thailand, with interests in real estate, department stores, retail, hospitality, and restaurants.
Singha, Masan Consumer and Masan Brewery
In late December 2015 Masan Group Corporation (Masan) and Singha Asia Holding Pte., Ltd. (Singha) signed agreements to form a strategic partnership. Upon investing $1.1 billion, Singha will own 25 per cent of Masan Consumer Holdings and 33.3 per cent of Masan Brewery. Masan Consumer Holdings will own the remaining 66.7 per cent of Masan Brewery.
The balance of the $450 million investment package will be transferred to raise the ownership rate of Singha at Masan Consumer Holdings to 25 per cent from the aforementioned 14.3 per cent.
In January 2016, Masan announced the receipt of its first investment, worth $650 million from Singha.
Of the amount, $50 million went to hold 33.3 per cent of the stakes at Masan Brewery. The remaining $600 million is to retain 14.3 per cent of the stakes at Masan Consumer Holdings, which used the investment to lift its holding rate at Masan Consumer from 77.8 to 96.7 per cent.
Bank of Tokyo-Mitsubishi UFJ and VietinBank
In December 2012, Bank of Tokyo-Mitsubishi UFJ (BTMU), the core retail and commercial bank arm of Mitsubishi UFJ Financial Group Inc., agreed to buy a 20 per cent stake in VietinBank, one of the leading state-owned commercial banks in Vietnam, for VND15.5 trillion ($743 million), at the unit price of VND24,000.
This transaction was the largest-ever M&A transaction in the Vietnamese banking industry to date and a milestone for VietinBank after its equitisation in 2008, enhancing the bank’s financial capabilities and securing stable long-term funding for the bank’s development plan, and raising VietinBank’s corporate profile with expected benefits from BTMU’s global expertise.
The transaction was executed efficiently on a tight timetable and has shown both parties’ willingness to form a strategic alliance and capitalise on the growth potential of Vietnam.
TCC Holding and Metro Cash & Carry Vietnam
In early 2016, Thai company TCC Group, the largest investor in Berli Jucker PCL (BJC), completed the purchase of Metro Cash & Carry Vietnam from the German Metro Group.
Notably, on January 7, Metro Group and TCC reported that they have obtained all approvals required to complete the sale of Metro Cash & Carry Vietnam to TCC. TCC thereby acquired Metro Group’s complete wholesale operations in Vietnam, including all 19 wholesale markets and the related real estate portfolio for an enterprise value of €655 million ($711 million).
One year later, in January 2017, TCC Group officially announced rebranding Metro Cash & Carry Vietnam to MM Mega Market Vietnam.
The new logo is a symbol of MM Mega Market’s mission to provide the newest experiences for customers and this is achieved through the following 5M ideology—Meet, More, Magnificent, Meaningful, Manner—which represents the five dots above MM.
Mizuho and Vietcombank
Vietcombank, the nation’s largest listed bank by market value, completed its four-year search for a strategic foreign investor by clinching a deal to sell a 15 per cent stake for $567.3 million to Japan’s Mizuho Corporate Bank Ltd. Accordingly, Mizuho Corporate Bank Ltd. bought 347.6 million new shares in Vietcombank for VND34,000 ($1.63) piece.
As part of the deal, Mizuho was Vietcombank’s only strategic foreign partner and provided the local institution with technical services to improve its business performance, including sending Japanese experts to Vietnam, training Vietcombank staff, and offering business opportunities.
Siam City Cement and LafargeHolcim
Last year, SCC, which is the second largest cement group in Thailand, spent $524 million buying 65 per cent of LafargeHolcim Vietnam, showcasing its strong interest in the Vietnamese cement market. After the transaction, Holcim Vietnam was re-branded as Insee Cement.
This deal was recognised as the Best Acquisition Deal at Vietnam M&A Forum 2017.
Fraser & Neave Ltd. and Vinamilk and SCIC
In the middle of December 2016, F&N spent $500 million on purchasing nearly 80 million Vinamilk shares, equivalent to 5.4 per cent of the dairy firm’s stakes.
After the auction, F&N increased its holdings in Vinamilk to 16.35 per cent and became the second largest stakeholder, following SCIC with 39.33 per cent.
It was recognised as the Investment and Private Equity Deal of the Year at Vietnam M&A Forum 2017.