Tasty takeovers sorely lacking as 2020 continues to frustrate

Merger and acquisition deals in Vietnam’s food and beverages arena in the first five months of this year were inevitably subdued due to global slowdowns across the board.

1495p16 tasty takeovers sorely lacking as 2020 continues to frustrate
Tasty takeovers sorely lacking as 2020 continues to frustrate, illustration photo, source:MSN

Vietnam recorded no megadeals in the given period apart from the noticeable deal from Masan Group. Ardolis Investment Pte., Ltd., a subsidiary of Singapore’s sovereign wealth fund GIC, recently raised its ownership in the consumer staple group from 5.67 to 8.97 per cent after purchasing 38.92 million shares. Following the transaction, the GIC-led consortium has increased its stakes at Masan from 9.7 to 13.03 per cent.

Consolidated net revenues at Masan totalled VND17.63 trillion ($761.74 million) for the first quarter, up 116.1 per cent on-year. The increase was attributable to high double-digit growth at Masan Consumer Holdings and consolidation of newly-acquired VinCommerce.

VinCommerce itself reported revenue growth of 40.3 per cent over last year’s period to VND8.71 trillion ($376.4 million). Meanwhile, Masan’s MEATLife business continued to surge, with net revenues rising by nearly 85 per cent on-quarter to VND453 billion ($19.57 million) in the first quarter of 2020.

In addition, Kido Foods (KDF)and Tuong An Vegetable Oil have submitted proposals to their shareholders about a merger with KIDO Corporation (KDC) at its annual general stakeholder meeting. The move will help the two sail through the tough time, and stimulate growth in the competitive market.

After its initial public offering on the Unlisted Public Company Market (UPCoM) market in 2017, KDF shares have recorded low liquidity and failed to attract the attention of investors. Despite being the leader of the Vietnamese ice cream industry with a 41 per cent market share, the company has seen volatile business. The spread of the COVID-19 pandemic has changed customer behaviour for ice cream and other frozen products. As a result, KDF merged with KDC to take advantage of the latter’s financial and management capabilities to consolidate growth.

Tuong An also faced several challenges in 2020 due to economic turmoil and volatile material prices caused by the pandemic. The competition has become fierce as more vegetable oil brands roll out into the market. Other vegetable oil producers have also reduced prices to capture market share.

 

“Due to market volatility and global challenges remaining unresolved, in the near term we expect to see a slowdown in the number of high-value merger and acquisition (M&A) transactions in the food sector,” said Seck Yee Chung, partner at Baker & McKenzie Vietnam. “While Vietnam has effectively contained the virus, it has also been significantly affected by the pandemic. Supply chain disruption during this has severely impacted the export of agricultural products and other processed goods to major markets such as China, the United States, and Europe.”

Even through government-enforced travel bans, nationwide social distancing, and restaurant closures, there has been an increase in the demand of food and grocery consumption. However, out-of-home consumption has declined due to the restrictions and the hesitation of middle-income consumers in spending their money during the crisis.

Chung added it is expected the economy will gradually become more vibrant again. In the longer term, and with countries better able to manage the outbreak, easing of travel restrictions, and global supply chains reconnecting, this will help spur the Vietnamese economy – and the overall food and agriculture sector will continue to be of great interest to overseas investors. The technology and logistics platforms that support such growth also present exciting opportunities.

According to FiinGroup, a provider of financial data and business information, food and beverages have always been a magnet for M&A thanks to the sector’s high and stable growth rate, driven by Vietnam’s big population, rapid urbanisation, emerging middle class, and resilient GDP growth. From 2011 to the first half 2019, 245 deals value at $8.95 billion have been recorded, led by major players in the industry such as Masan, KIDO, and The PAN Group. VIR

Thanh Van

Vietnam’s food products used by famous foreign brands

Vietnam’s food products used by famous foreign brands

Vietnam’s food materials have been used to make excellent products of famous brands that are consumed all over the world.

Businesses report big losses, but pharmacies, food companies see profits

Businesses report big losses, but pharmacies, food companies see profits

The Q1 finance reports released by enterprises in nearly all business fields, from manufacturing and real estate to aviation and oil and gas, show big losses. Large enterprises have reported huge losses of trillions of dong.

 
 

Other News

.
Chubb Life Vietnam honored 'Top Insurance Workplaces 2020'
Chubb Life Vietnam honored 'Top Insurance Workplaces 2020'
BUSINESSicon  14/09/2020 

Insurance Business Asia, a world-renowned insurance publication, has just named Chubb Life Insurance Vietnam Company Limited (Chubb Life Vietnam) among the “Top Insurance Workplaces 2020” in Asia.

Warm welcome to eagles, not to tigers or snakes
Warm welcome to eagles, not to tigers or snakes
BUSINESSicon  13/09/2020 

The author of this article received a request to write about his contributions to policies on foreign direct investment (FDI) attraction.

How to attract high-quality foreign direct investment
How to attract high-quality foreign direct investment
BUSINESSicon  13/09/2020 

Industrialization requires high-quality foreign direct investment (FDI). Many issues must be addressed, including how to developed a skilled workforce.

Predicted consumer resets to shape Vietnam FMCG market: Nielsen
Predicted consumer resets to shape Vietnam FMCG market: Nielsen
BUSINESSicon  14/09/2020 

The news cycle related to Covid-19 transmission no longer influences trends on the FMCG market in Vietnam and Southeast Asia.

Lam Dong halts agricultural tourism projects
Lam Dong halts agricultural tourism projects
TRAVELicon  13/09/2020 

Despite keen interest from businesses to invest in agricultural tourism in the Central Highlands province of Lam Dong, the provincial government is not granting an approval to such projects for the time being.

Vingroup rejects rumour about selling stake in Vinmec and Vinschool
Vingroup rejects rumour about selling stake in Vinmec and Vinschool
BUSINESSicon  13/09/2020 

Vingroup rejects rumour about selling its stake in Vinmec and Vinschool, reiterating that these two systems play a crucial role in the group’s ecosystem.

Hotel rates down steeply as COVID-19 keeps away tourists
Hotel rates down steeply as COVID-19 keeps away tourists
BUSINESSicon  12/09/2020 

The hotel industry is facing arguably its greatest challenge as the impacts of COVID-19 keep away foreign visitors from the country.

MPI prepares new decree on SOE information disclosure
MPI prepares new decree on SOE information disclosure
BUSINESSicon  12/09/2020 

The Ministry of Planning and Industry (MPI) is developing a new decree to guide State-owned enterprises (SOEs) on disclosing information, aiming to...

Vietnam likely to gain export target for timber and wooden products this year: experts
Vietnam likely to gain export target for timber and wooden products this year: experts
BUSINESSicon  12/09/2020 

 Experts believe Viet Nam this year will reach its export target for timber and wooden products at US$12 billion, despite the impact of the COVID-19...

VIETNAM'S BUSINESS NEWS HEADLINES SEPTEMBER 13
VIETNAM'S BUSINESS NEWS HEADLINES SEPTEMBER 13
BUSINESSicon  13/09/2020 

Vietnam home to nearly 50,000 rooftop solar projects

Vietnam's energy sector a magnet for foreign investors
Vietnam's energy sector a magnet for foreign investors
BUSINESSicon  11/09/2020 

National electricity demand is expected to increase by 8.5 per cent a year until 2025 and 7 per cent until 2030, making Vietnam an attractive market for foreign energy investors.

Ministry asks for tightened management on condotels, officetels, shophouses
Ministry asks for tightened management on condotels, officetels, shophouses
BUSINESSicon  12/09/2020 

The Ministry of Construction has asked provincial and municipal people’s committees to tighten management on condotels, officetels, resort villas and shophouses 

Auto industry steers strategy towards wider supply chains
Auto industry steers strategy towards wider supply chains
BUSINESSicon  11/09/2020 

Vietnam’s automobile industry is transforming drastically but it still lacks scenarios to join the global supply chains after the COVID-19 pandemic.

VIETNAM'S BUSINESS NEWS HEADLINES SEPTEMBER 12
VIETNAM'S BUSINESS NEWS HEADLINES SEPTEMBER 12
BUSINESSicon  12/09/2020 

Vietnam recovery prospects brightest in Southeast Asia: ICAEW

Versatility letting retail grow anew
Versatility letting retail grow anew
BUSINESSicon  10/09/2020 

The local retail sector is set to maintain its encouraging growth towards the end of the year, with new drivers coming online.

Anxious carmakers hoping losses remain in rear mirror
Anxious carmakers hoping losses remain in rear mirror
BUSINESSicon  10/09/2020 

Despite efforts in converting part of their facilities to produce ventilators and face masks for fighting the coronavirus pandemic, global carmakers are still reporting losses 

Vietnam's current account forecast at 3.7% in 2020
Vietnam's current account forecast at 3.7% in 2020
BUSINESSicon  10/09/2020 

Vietnam’s current account surplus could narrow to 3.7 per cent in 2020 from 4.9 per cent last year due to the impacts of the COVID-19 pandemic, according to Fitch Solutions.

Trade plummets at HCM City’s wholesale markets after second COVID-19 outbreak
Trade plummets at HCM City’s wholesale markets after second COVID-19 outbreak
BUSINESSicon  10/09/2020 

Wholesale markets in HCM City are facing a serious crisis due to the second COVID-19 outbreak. 

Businesses race against the clock to issue bonds
Businesses race against the clock to issue bonds
BUSINESSicon  11/09/2020 

Large corporations are rushing to seek capital through bond issuances before a new regulation, with stricter requirements, takes effect.

VN farm produce prices plummet amid oversupply, impact of Covid-19
VN farm produce prices plummet amid oversupply, impact of Covid-19
BUSINESSicon  11/09/2020 

Booth avocado, the specialty of Dak Lak province, is now selling at VND10,000-20,000 per kilogram, and the price of passion fruit has also fallen dramatically.

 
 
 
Leave your comment on an article

OR QUICK LOGIN