Newsletter
Vietnam M&A Spotlight - August 2020
Freshfields' Vietnam M&A Spotlight keeps you up-to-date with the key business and legal developments in this sector. Please contact us if you would also like to receive either our Vietnam Infrastructure Spotlight or our Vietnam Competition Law Spotlight.
MARKET UPDATES
Sales by the State
- Beer. Vietnamese government plans to sell its remaining 36 per cent stake in the country’s largest brewer, Sabeco. The Ministry of Industry and Trade (MoIT) has been instructed to complete the transfer of the government’s stake to the State Capital Investment Corporation (SCIC) by the end of August to pave the way for the sale. Source: Vn Express International
FMCG
- Milk. Vietnam-focused asset manager VinaCapital and Daiwa PI Partners have divested a 28 per cent stake in International Dairy Products, one of Vietnam’s home-grown dairy products firms. Financial terms of the divestment were not disclosed. Vietnamese consumer goods and dairy-focused investor Blue Point has acquired the stake. Source: Vietnam Investment Review
- More Milk. Moc Chau Milk, a subsidiary of Vietnam’s biggest dairy company Vinamilk, seeks to increase its foreign ownership cap to 100 per cent by removing some business line as to which the government limits foreign ownership, such as wholesale trade of fertilizer and pesticides. Source: Vn Express International
Finance
- Finance leasing. Japan’s Mitsubishi UFJ Lease & Finance plans to invest in VietinBank Leasing Co., Ltd by acquiring a 49 per cent equity interest. The stake sale in its leasing unit follows VietinBank’s divestment of its remaining 4.91 per cent stake in Saigonbank for US$13.1 million last year. Source: Deal Street Asia
- Insurance. Manulife Financial Corp. is emerging as the leading bidder for Aviva Plc’s Vietnamese unit. Manulife is weighing a deal that would include a bancassurance agreement with VietinBank to sell insurance products through its branches. Bancassurance deals have become a popular way for insurers to expand in Southeast Asia. Source: Vietnam Insider
Banks
- Threats to walk away. State-owned petroleum distributor Petrolimex, which currently holds 40 per cent of PG Bank, has threatened to pull its capital from the bank if it did not merge with HD Bank before 31 August 2020. The State Bank of Vietnam gave its in-principle approval to the deal in September 2018 but has not approved the final project yet. Source: Vn Express International
Retail
- Walk away. Tiki and Sendo have been in merger talks to join forces to beat overseas e-commerce platforms Lazada and Shopee. A planned merger is understood to have been called off due to disagreement on the merger terms and the performance gap between two companies during the Covid-19 crisis. Source: Deal Street Asia
Pharmaceuticals
- Gaining weight. South Korean conglomerate SK Group has become a large shareholder of Vietnamese pharmaceutical firm Imexpharm as part of its efforts to expand its presence in Vietnam, addingto its considerable portfolio of shares in Vingroup, Masan and PV Oil. Source: Vietnam Investment Review
Real Estate
- Heavyweights. A consortium led by U.S. private equity giant KKR and including Singapore’s state investor Temasek Holdings, has acquired 6 per cent stake in Vietnam property developer Vinhomes for US$650 million. Source: The Straits Times
- Mediumweight. Gelex targets to acquire a controlling stake in Viglacera in 2020 and other smaller firms to increase its market share in the industrial real estate sector. Source: Vietnam News
- Lightweight. South Korea cinema operator CJ CGV will offload a 25 per cent stake in its Vietnam-based real estate affiliate CJ Vietnam Co., Ltd. for around US$27 million, in order to improve its financial structure which has significantly weakened in the aftermath of the Covid-19 crisis. Source: Deal Street Asia
Transport
- On the move. The two local ride-hailing platforms, be and FastGo, could negotiate a merger to break the dominance of Grab in Vietnam.As a result of tough competition with the experienced overseas players, be and FastGo have remained inferior in the local market. Source: Vietnam Net
Aviation
- Flying lower. Parent company FLC has asserted that it has had no plans to sell its Bamboo Airways stake to another unnamed Vietnamese conglomerate, as recently rumoured on social media. FLC is seeking permission to make an IPO for the airline. Source: Vn Express International
- …and lower. Vietnam Airlines is struggling with a possible cash deficit of some VND16 trillion this year due to the impact of Covid-19. To ease pressure on its cash liquidity, Vietnam Airlines is asking SCIC to inject cash into the company. Source:Vietnam News and The Saigon Times
Technology
- Flavour of the month. SCIC will offer 46 million shares of the tech group FPT Corporation for auction, hoping to receive the minimum of VND49,400 apiece. The auction will be held on 7 August, and foreign investors are not eligible to participate in the auction because FPT has run out of room for foreign capital investment. Source: Bizhub
Oil & Gas
- Going green? Plans for Petrolimex to take a stake in a refinery of Japanese oil company Eneos have fallen more than a year behind schedule, as the Vietnamese government holds off on major decisions ahead of the upcoming overhaul in the Communist Party’s leadership. Source: Nikkei Asian Review
- Bolted horses? The MoIThas proposed to the Government to allow Vietnamese petrol retailers to transfer stakes to foreign investors, but not exceeding 35 per cent. Once its proposal is approved, the petrol and oil trading scene may see more foreign players. Source: Vietnam Plus
