Thailand
Thai investors strive to control Vietnam’s leading companies at all cost
The Hanoitimes – Big conglomerates from Thailand have been carrying out large-scale acquisitions of Vietnamese leading enterprises, regardless of price or time, to be able to take part in the enterprises` management and operation.
After many years pursuing the target of taking part in the management of Vietnam’s leading plastics companies, the Nawaplastic Industries Co. Ltd (Saraburi) – a subsidiary of Thailand’s Siam Cement Group (SCG) – has recently announced the purchase of an additional 1.69 million shares of Binh Minh Plastics Company (BMP). The transactions were conducted from May 14 to June 12.
The deal took the Thai investor closer to dominating the Vietnam’s leading plastics producer by increasing its stake from 50.89 percent to 52.96 percent.
Currently, Saraburi has three members in BMP’s board of directors and one member in the company’s supervisory board.
However, to exert more control over BMP’s management and operations, Saraburi has to accept a loss of more than VND800 billion (US$35.08 million) when it spent VND2.33 trillion ($102.2 million) to acquire a 29.51 percent stake of of BMP from State Capital Investment Corporation (SCIC) in March, due to the drop of BMP share prices.
The same move was seen at the acquisition of the Saigon Alcohol Beer and Beverage Corporation, kown as Sabeco by Thai Beverage (ThaiBev). Sabeco controls some 40% share of the Vietnamese beer market.
After acquiring the majority stake in the Vietnam’s leading brewer in December for $4.8 billion, three representatives of ThaiBev were officially accepted in Sabeco’s board of directors following an extraordinary shareholders meeting held in April, of which Koh Poh Tiong was appointed as Sabeco’s chairman.
Koh told shareholders that the new board aims to make Saigon Beer the leading brand in Vietnam, and also to market Sabeco products regionally beginning with Singapore and Thailand using Fraser and Neave, ThaiBev, and TCC Group’s networks.
However, like Saraburi, ThaiBev has to accept a big loss of VND29.3 trillion ($1.28 billion) to be able to have more control over Sabeco’s management and operations, as Sabeco shares have lost nearly 27 percent of their value over the past four months, and traded at VND234,600 apiece on June 15.
In the dairy industry, though failing to own a large stake of Vinamilk (VNM) in an auction held by the SCIC late last year, Thailand’s F&N Dairy Investment is still acquiring VNM shares step-by-step to increase its stakes in the Vietnam’s leading dairy producer.
In the latest move, the Thailand-owned company has recently registered to buy an addition of 14.5 million VNM shares to increase the stake to 18.31 percent. The transactions have been conducted from June 6 to July 5.
More investments on the cards
Though a total $8-9 billion investment capital is not as much as their peers from South Korea, Japan, Hong Kong (China) or Malaysia, not many investors in the world deeply pour capital into Vietnam like Thailand.
Head of Thai Enterprise association Saranya Skontanarak affirmed that Vietnam is considered a major place for Thai investors.
According to analysts, Thai investors will continue to pay special attention to the Vietnam market as Vietnam has been following the development path of Thailand in the last several decades, such as rapid economic growth and fast-growing middle class.
Besides, Vietnam has a well-developed domestic market, favorable geographic location and low production cost, which is well suited to the development of industrial production and export of goods to ASEAN.
Kelvin Tan, chief executive officer of HSBC Thailand, said during a visit to Vietnam late last year that many Thai businesses were very interested in the Vietnamese market and it was predicted that many would continue to invest in Vietnam to take advantage of the opportunities opened up in many areas.
Thai businesses would increase their investment in the Vietnamese market through both foreign direct investment and mergers and acquisitions, Tan said.
Currently, Saraburi has three members in BMP’s board of directors and one member in the company’s supervisory board.
However, to exert more control over BMP’s management and operations, Saraburi has to accept a loss of more than VND800 billion (US$35.08 million) when it spent VND2.33 trillion ($102.2 million) to acquire a 29.51 percent stake of of BMP from State Capital Investment Corporation (SCIC) in March, due to the drop of BMP share prices.
The same move was seen at the acquisition of the Saigon Alcohol Beer and Beverage Corporation, kown as Sabeco by Thai Beverage (ThaiBev). Sabeco controls some 40% share of the Vietnamese beer market.
After acquiring the majority stake in the Vietnam’s leading brewer in December for $4.8 billion, three representatives of ThaiBev were officially accepted in Sabeco’s board of directors following an extraordinary shareholders meeting held in April, of which Koh Poh Tiong was appointed as Sabeco’s chairman.
Koh told shareholders that the new board aims to make Saigon Beer the leading brand in Vietnam, and also to market Sabeco products regionally beginning with Singapore and Thailand using Fraser and Neave, ThaiBev, and TCC Group’s networks.
However, like Saraburi, ThaiBev has to accept a big loss of VND29.3 trillion ($1.28 billion) to be able to have more control over Sabeco’s management and operations, as Sabeco shares have lost nearly 27 percent of their value over the past four months, and traded at VND234,600 apiece on June 15.
In the dairy industry, though failing to own a large stake of Vinamilk (VNM) in an auction held by the SCIC late last year, Thailand’s F&N Dairy Investment is still acquiring VNM shares step-by-step to increase its stakes in the Vietnam’s leading dairy producer.
In the latest move, the Thailand-owned company has recently registered to buy an addition of 14.5 million VNM shares to increase the stake to 18.31 percent. The transactions have been conducted from June 6 to July 5.
More investments on the cards
Though a total $8-9 billion investment capital is not as much as their peers from South Korea, Japan, Hong Kong (China) or Malaysia, not many investors in the world deeply pour capital into Vietnam like Thailand.
Head of Thai Enterprise association Saranya Skontanarak affirmed that Vietnam is considered a major place for Thai investors.
According to analysts, Thai investors will continue to pay special attention to the Vietnam market as Vietnam has been following the development path of Thailand in the last several decades, such as rapid economic growth and fast-growing middle class.
Besides, Vietnam has a well-developed domestic market, favorable geographic location and low production cost, which is well suited to the development of industrial production and export of goods to ASEAN.
Kelvin Tan, chief executive officer of HSBC Thailand, said during a visit to Vietnam late last year that many Thai businesses were very interested in the Vietnamese market and it was predicted that many would continue to invest in Vietnam to take advantage of the opportunities opened up in many areas.
Thai businesses would increase their investment in the Vietnamese market through both foreign direct investment and mergers and acquisitions, Tan said.
Source: http://www.hanoitimes.vn/investment/2018/06/81E0C8B2/thai-investors-strive-to-control-vietnam-s-leading-companies-at-all-cost/