Vietnam’s 10 outstanding M&A deals in 2021
During the 10-month period, Vietnam’s M&A market attracted over US$8.8 billion, a surge of 18% against 2020 and 13.7% compared to the pre-pandemic period in 2019.
In 2021, the Covid-19 pandemic and emergence of new variants continue to put the world’s economy under great challenges. Vietnam’s M&A market, however, has remained firm on track of recovery with several major deals.
Japan-based SMBC Group acquires 49% stake in FE Credit
|VPBank Finance Company has now been renamed VPBank SMBC Finance Company.|
On October 28, Vietnam’s VPBank announced the completion of the sale of a 49% stake worth an estimated US$1.4 billion in VPBank Finance Company (FE Credit) to SMBC Consumer Finance (SMBCCF), a wholly-owned subsidiary of Japan’s Sumitomo Mitsui Financial Group (SMBC Group).
Given the move, VPBank Finance Company has now been renamed VPBank SMBC Finance Company, with VPBank still retaining a 50% in FE Credit, while the remaining 1% is held by another investor.
The divestment of half of its stake in FE Credit will allow VPBank to enhance its financial capability and further expand business activities in other promising segments. Meanwhile, the investment will allow SMBCCF, a leading consumer finance company in Japan, to expand its business franchise in the region, with accumulated know-how and experience in Japan and other Asian countries.
SMBC Group is one of the three biggest banking and financial groups in Japan, with total assets of over $2.1 trillion as of December 31, 2020. The group operates in retail banking, corporate banking, and investment banking worldwide, being present in over 40 countries.
VPBank said the deal raised nearly VND4 trillion ($175 million) for the state budget in tax.
SHB sells financial consumer arm to Thailand Bank
|Overview of the signing ceremony.|
In late August, the Hanoi-based Saigon-Hanoi Commercial Bank (SHB) has reached a deal to transfer a 50% stake in its financial consumer arm SHB Finance to Thailand’s Bank of Ayudhya Public Company (Krungsri), with another 50% set to change hand in the next three years.
While details of the deal were not disclosed, it was reported that the deal would cost Krungsri around VND3.5 trillion ($156 million).
SHB Finance posts registered capital of VND1 trillion ($43.6 million), while Krungsri is currently the fifth-largest financial corporation in Thailand in terms of total assets and outstanding loans, with Mitsubishi UFJ Financial Group (MUFG) acting as its parent company by holding 76.88% stake.
The Japanese financial conglomerate is also a strategic shareholder in Vietnam’s Vietinbank with a nearly 20% stake.
Alibaba and Baring Private Equity Asia invest $400 million in CrownX
|Inside a Vinmart store.|
In mid-June, Masan Group announced the completion of private issuance of a 5.5% stake in the CrownX Corporation to a consortium led by Alibaba Group and Baring Private Equity Asia (BPEA) for a cash consideration of $400 million.
The CrownX is Masan’s integrated consumer retail arm that consolidates its interests in Masan Consumer Holdings and VinCommerce. The transaction implies a pre-money valuation of $6.9 billion for The CrownX, or $93.5 per share. Masan now owns 80.2% of it.
As part of Alibaba’s investment, CrownX will now partner with Lazada to build the company’s digital presence and capabilities and accelerate the offline to online (O2O) market in Vietnam.
On the other hand, VinCommerce will enter a strategic cooperation agreement with Lazada, Alibaba’s Southeast Asian e-commerce platform.
BPEA is one of Asia’s largest private equity firms with over $23 billion worth of assets under management.
SK Group purchases 16.26% stake in VinCommerce
|SK Group, South Korea’s third-largest conglomerate.|
In April, SK Group, South Korea’s third-largest conglomerate said it would spend $410 million to acquire a 16.3% stake in VinCommerce.
Woncheol Park, representative director of SK Southeast Asia Investment, SK Group’s subsidiary that makes the investment, expressed his strong belief in the potential of Vietnam’s online and offline retail sector, expecting VinCommerce to play a vital role in its modernization.
“Our investment in VinCommerce is a part of SK’s broader strategy of investing in Vietnam’s fast-growing sectors. This is another landmark transaction for SK and reaffirmation of our commitment to Masan Group and Vietnam,” he said.
KKR invests $100 million in Equest Education Group
KKR, a leading global investment firm with $367 billion of assets management, on May 31 announced an investment of $100 million in EQuest Education Group, a leading educational services provider in Vietnam.
The investment is made through the KKR Global Impact Fund (“KKR Global Impact” or “the Fund”), and marks the Fund’s fourth investment globally in the educational and workforce development as part of the Fund’s thematic focus on Lifelong Learning.
EQuest operates a diversified portfolio across the educational sector in Vietnam, focusing on four core segments including K-12 bilingual schools, tertiary and vocational institutions, English enrichment courses, and digital learning solutions.
Its K-12 portfolio, which serves more than 9,000 students in its 8 campuses, has gained a strong reputation in Vietnam where there is a rapidly growing demand for an affordable bilingual curriculum with strong efficacy. As a group, EQuest has more than 110,000 students enrolled across its segments each year, positioning the Company as one of the largest private educational services providers in Vietnam.
“Investing in Vietnam and supporting the growth of the country’s businesses and industries is a key part of KKR’s strategy in Asia. As Vietnam’s position continues to rise on the world’s economic stage, access to affordable, high-quality education solutions plays an important role in meeting the nation’s objectives,” said Ashish Shastry, Co-Head of Asia Private Equity and Head of Southeast Asia at KKR.
Thaco acquires South Korea’s Emart retail chain in Vietnam
On October 9, Vietnam’s car automaker Truong Hai Auto Corporation (Thaco) said it has taken over the Emart retail chain in Vietnam and operates it under franchise.
As the deal takes effect, South Korea's largest retailer will receive royalty payments from the Vietnamese buyer instead of directly operating the business. Emart expects to expand its retail chain to 10 stores in Vietnam by 2025.
In Thaco’s general meeting, Chairman Tran BA Duong set the goal for the Emart hypermarket chains to generate revenue of over VND1.8 trillion ($79 million) in 2021, an increase of 10% against last year.
Masterise Group acquires property project from Vinhomes
|Vinhomes Grand Park.|
Green City Development, a subsidiary of Vinhomes, in July, said it has transferred two land plots of up to seven hectares under the Vinhomes Grand Park to Masterise Homes, a member of Masterise Group.
The Vinhomes Grand Park project covers an area of 365 hectares, located 20-25 kilometers away from downtown Ho Chi Minh City, consisting of 71 high-rise buildings of 25 to 36 floors, providing 44,000 apartments for the market.
Masterise Group is currently the property developer of major projects in both Hanoi and Ho Chi Minh City, including the Premier Berriver 390, Masteri Waterfront, or Masteri Center Point.
Bamboo Capital purchases 71% stake in AAA
Bamboo Capital (BCG) on October 1 agreed to purchase a 71% stake in insurance company AAA and the deal is pending approval by the Ministry of Finance.
Under the plan, Bamboo Capital expects to acquire nearly 80 million shares from AAA worth VND700 billion ($30.5 million).
AAA Insurance is specializing in non-life insurance with a charter capital of nearly $48.9 million. The company became a member of Insurance Australia Group (IAG) in 2013 which is holding an 80.47% stake in the local insurance company, while Eximbank holds 5.28%.
Bamboo Capital is a multi-industry enterprise focusing on manufacturing and agriculture, construction and commerce, infrastructure and real estate, and renewable energy.
Mizuho forks out $170 million to buy a 7.5% stake in Momo
Japan-based Mizuho Bank acquired a 7.5% stake of local firm M-Service, which operates e-wallet Momo, in a deal worth $170 million.
The acquisition deal, which will be completed by the end of the year, is expected to create collaborations between the payment app and Vietcombank, a Vietnam-based bank that Mizuho previously invested in.
MoMo has more than half of the market share in Vietnam’s payments space, and it is poised to become a super app on the back of its 20 million users.
Kido buys 44.2 million shares of Vocarimex
In November, Kido Group acquired over 44.2 million shares of the Vietnam Vegetable Oils Industry Corporation (Vocarimex) in an auction held by the Government’s investment arm State Capital Investment Corporation (SCIC).
The winning bid price offered by Kido was VND28,400 per share, in turn putting the total deal value to VND1.25 trillion ($55 million).
Given this move, Kido has raised its stakeholding in Vocarimex from 51% to 87.29% while SCIC completed the state divestment from the company.
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