The auction of up to 54 percent of Sabeco, or equivalent to 5 billion USD in what is set to be Vietnam's biggest privatisation, offers brewers access to a fast-growing market with a youthful population and beer drinking culture.
Sabeco is seen as attractive as assets are scarce in a highly consolidated global beer market. Thai Bev, controlled by tycoon Charoen Sirivadhanabhakdi, is shaping up as a strong contender, as it is familiar with the Vietnam system and sees Sabeco as key to expanding outside its home market.
Last month, a Thai Bev unit bought a 49 percent stake in a Vietnamese company which could be used as a vehicle to bid for Sabeco as a domestic player, giving it an advantage over international rivals.
Thai Bev said in October it was keen to grow through acquisitions in markets such as Vietnam. Firms controlled by Sirivadhanabhakdi also hold a 19 percent stake in Vietnam's Vinamilk. A spokeswoman for AB InBev, the world's biggest brewer, said the company was committed to Vietnam and to growing its business for the long-term. A spokesman for Japan's Kirin said it was carefully considering its options.
Other potential bidders include Asahi Group Holdings , San Miguel and Heineken, though several people said Heineken already had a strong business in Vietnam and could sit out an expensive auction that values Sabeco at about 36 times core earnings - more than double the trading multiples of around 15 for some global brewers, according to Reuters data. Heineken, which already owns 5 percent of Sabeco, did not respond to requests for comment.
Asahi could not be immediately reached for comment, but the Japanese firm's president told Reuters in September it was studying Sabeco. San Miguel's president Ramon Ang said the Philippine conglomerate was interested to bid for Sabeco. Kirin owns around half of its affiliate San Miguel Brewery.
The Sabeco auction is on December 18, and bidders who are keen to own a stake equal to 25 percent or more of Sabeco's shares need to inform local authorities a week before the auction. Foreign ownership in Sabeco is limited to 49 percent. That means overseas bidders can only bid for a minority stake of as much as 39 percent as foreign entities already own 10 percent.
Lack of control could put off some possible bidders, the people said. "Having control of the business is very important for these international brewers because the multiple is very high. If you're going to pay that much you want to be able to institute your plans," said one of the people, who expected international firms to sell their own premium beers like Budweiser, Heineken and Kirin through Sabeco's distribution network, in addition to Sabeco's beers, which include the Bia Saigon and 333 brands.
Vietnam's Ministry of Industry and Trade, which represents state shares in Sabeco, said foreign investors can link with Vietnamese firms to buy Sabeco shares, but have to comply with local laws and regulations. Sabeco's share price has nearly tripled since its listing a year ago, with analysts citing a small float as inflating its market value.
The brewer's sky-high valuations and a complicated sale process could pose challenges for some potential bidders. The Sabeco sale could also set the pace for peer Habeco, in which Danish brewer Carlsberg A/S owns 17.3 percent.
