ThaiBev struggling to offload Sabeco

Budweiser APAC has eyes on Sabeco, while ThaiBev intends to quit one of the biggest beer markets of the region.

ThaiBev struggling to offload Sabeco

Sabeco is the leading beer producer in Vietnam

ThaiBev wants to quit its brewery business via a Singaporean initial public offering next year that could raise up to $2.5 billion. However, analysts think the move is a feint intended to seek a buyer for the company’s highly valued Vietnamese unit.

The proposed IPO, which would be the city’s biggest in almost a decade, would value its beer-making unit at up to $12 billion, according to people familiar with the matter.

ThaiBev, which is owned by Bangkok-based billionaire Charoen Sirivadhanabhakdi, is best known for Thai beer brand Chang. In 2017 the company acquired a majority stake in Vietnam’s biggest beer producer Sabeco for nearly $5 billion.

Meanwhile, after listing its Budweiser APAC in Hong Kong (China) last week, AB InBev said it will be looking to expand in Asia, especially in China, South Korea, India, and Vietnam.

Euan McLeish, an analyst at Bernstein, told Financial Times that the proposed valuation post-IPO could cause issues. He added that with no immediate need for capital, the move could be intended to spur an offer from Budweiser APAC for Sabeco, which has a 55 per cent share of the Vietnamese market.

“Bud APAC management [has] made no secret of their desire to expand in Vietnam,” McLeish said. “The challenge is that it is very hard to see a valuation [for Sabeco] that satisfies everybody.”

ThaiBev paid 32 times pre-tax earnings for Sabeco when it bought the brewer from the Vietnamese government. ThaiBev’s stock – which is listed in Singapore – will be "crushed” by shareholders if Sabeco is sold for less than the purchase price.

“We think some sort of joint venture between the parties could be the best option,” McLeish added. Analysts at Jefferies added in a recent note that, “Bud APAC would be well-positioned to buy the business.”

The most promising market in the region

 

Southeast Asia could prove to have better prospects as it is projected to be a key driver for the growth of the global beer market, according to research analyst at Euromonitor, Jarred Neubronner.

"Key markets would be Vietnam and the Philippines," he added.

″AB InBev is still not among the top 10 players in the Southeast Asia region in 2018 due to the dominance of local beer players,” he said. “In order to grow further, the company needs to make a breakthrough in Southeast Asian countries such as Vietnam and the Philippines.”

Some players have already done so by acquiring domestic brands in some of these markets. Thai Beverage, for instance, bought into Vietnam’s largest beer company Sabeco (Saigon Beer Alcohol Beverage Corp) in a $4.8 billion deal in 2017. ” That immediately catapulted Thai Beverage to become the number one beer player by volume in Southeast Asia,” said Neubronner.

Across the Asia-Pacific, the company, which is listed in Singapore, ranked sixth in 2018 in terms of market share, with 3.9 per cent, according to Euromonitor.

“Many leading beer players in Southeast Asia are local players with strong local knowledge and distribution networks, so acquisitions of local beer companies are possible if AB InBev wishes to increase its market share in the region and tap into the expertise of established local players,” Neubronner said. VIR

Nguyen Huong

Heineken sells 5.2 million Sabeco's stocks

Heineken sells 5.2 million Sabeco's stocks

Heineken is no longer Sabeco’s (code: SAB) large shareholder as it has just sold 5.2 million SAB stocks worth VND1.219 trillion ($53 million).

Vietnam trade ministry rejects rumors on selling Sabeco shares to Chinese

Vietnam trade ministry rejects rumors on selling Sabeco shares to Chinese

To date, Saigon Beer Alcohol Beverage Corp (Sabeco) only has two major shareholders, including Vietnam Beverage with a 53.59% stake and the Ministry of Industry and Trade being state capital representative at the brewer with 36%.

 
 

Other News

.
Vietnam’s first private IT museum inspires young generation
Vietnam’s first private IT museum inspires young generation
SCI-TECH & ENVIRONMENTicon  24/05/2020 

Vietnam’s first information technology museum was established by Doctor Nguyen Chi Cong, former Head of the Department of Science and Technology under the Vietnam Information Technology Association.

Vietnam Railway reports VND600bn in losses
Vietnam Railway reports VND600bn in losses
BUSINESSicon  23/05/2020 

The Vietnam Railway Corporation (VNR) is facing losses of over VND600bn (USD26m) in 2020 because of Covid-19.

Four-month earnings slow but firms hope for better months ahead
Four-month earnings slow but firms hope for better months ahead
BUSINESSicon  23/05/2020 

A number of listed companies have announced lower earnings in April after closing for half of the month.

Demand for ready-built factories and warehouses increasing: CBRE
Demand for ready-built factories and warehouses increasing: CBRE
BUSINESSicon  23/05/2020 

The development of e-commerce together with delays to import and export activities due to disrupted logistics services has accelerated demand for ready-built factories and warehouses during the COVID-19 outbreak in Viet Nam.

Real estate firms gear up for the race after pandemic
Real estate firms gear up for the race after pandemic
BUSINESSicon  23/05/2020 

 Property firms are gearing up to tap opportunities from the post-pandemic recovery of the real estate market, which was predicted to soon get back on its feet.

Vietnam ready for new investment influx
Vietnam ready for new investment influx
BUSINESSicon  23/05/2020 

Foreign investors are speeding up the restructuring and reallocation of their production networks globally, with Vietnam considered a bright candidate for investment given its location within the world’s most dynamically-developing region.

S&P maintains stable outlook for Vietnam’s sovereign credit rating
S&P maintains stable outlook for Vietnam’s sovereign credit rating
BUSINESSicon  23/05/2020 

S&P Global Ratings has announced it has retained Vietnam’s sovereign credit rating at BB, with a stable outlook, according to the Ministry of Finance.

Covid-19 resets operational mode of VN retail market
Covid-19 resets operational mode of VN retail market
BUSINESSicon  23/05/2020 

Revenue from e-commerce has increased rapidly during Covid-19, but many traditional retailers have had to give back business premises to landlords.

Weak growth outlook to spur further monetary easing in Vietnam: Fitch Solutions
Weak growth outlook to spur further monetary easing in Vietnam: Fitch Solutions
BUSINESSicon  22/05/2020 

Given the weak economic outlook in Vietnam, Fitch Solutions expects further easing measures to be applied over the rest of 2020 as the country is still targeting real gross domestic product (GDP) growth above 5%.

Many hotels in HCMC priced too high for sale
Many hotels in HCMC priced too high for sale
BUSINESSicon  22/05/2020 

Many hotel owners in HCMC are putting their properties on sale due to the tourism decline inflicted by the coronavirus pandemic but at very high prices.

Agribusinesses rocked by twin negative impacts
Agribusinesses rocked by twin negative impacts
BUSINESSicon  22/05/2020 

In spite of several highlights, the agricultural picture remains gloomy due to twin blows of climate change and coronavirus.

Online food purchases predicted to rule the roost post-pandemic
Online food purchases predicted to rule the roost post-pandemic
BUSINESSicon  22/05/2020 

The online food and grocery delivery segment has gained remarkable momentum after multiple platforms launched services for those stuck at home during social distancing.

Vietnam set to become shelter for foreign real estate investment post-COVID-19
Vietnam set to become shelter for foreign real estate investment post-COVID-19
BUSINESSicon  22/05/2020 

Big companies like Apple, Nintendo, and Samsung and their supplier have switched out to limit damage.

Telecom industry expects high growth in the next five years
Telecom industry expects high growth in the next five years
BUSINESSicon  22/05/2020 

Five sectors of telecoms, information and technology, clean agriculture, clean technologies, retail, healthcare and pharmaceuticals have potential for high growth in the next three years.

Outstanding loans of twelve inefficient projects amount VND21 trillion
Outstanding loans of twelve inefficient projects amount VND21 trillion
BUSINESSicon  22/05/2020 

The outstanding loans of twelve inefficient projects under the Ministry of Industry and Trade totalled US$905 million as of the end of 2019, most were overdue, according to the Government’s report to the National Assembly.

Panasonic to move Thai-based production to Vietnam
Panasonic to move Thai-based production to Vietnam
BUSINESSicon  22/05/2020 

Japanese appliance-maker Panasonic on May 21 said that next year it will move its Thai-based production of refrigerators and washing machines to Vietnam, laying off some 800 workers.

Local air-conditioner brands join race for market share
Local air-conditioner brands join race for market share
BUSINESSicon  22/05/2020 

Vietnamese air conditioner manufacturers are increasingly using sophisticated technologies as they jostle for market share in a competitive market.

Enterprises in supporting industries busy with orders during COVID-19
Enterprises in supporting industries busy with orders during COVID-19
BUSINESSicon  23/05/2020 

While other industries complain about the lack of jobs, enterprises in supporting industries have been operating at full capacity to satisfy a high number of orders.

Repatriated citizens: high-quality human resources for post-Covid-19
Repatriated citizens: high-quality human resources for post-Covid-19
BUSINESSicon  22/05/2020 

The number of repatriated citizens in the post-Covid-19 period is expected to increase, which will put pressure on the labor force and social security.

Vietnamese businesses ready to be connected with “avenue” EVFTA
Vietnamese businesses ready to be connected with “avenue” EVFTA
BUSINESSicon  22/05/2020 

Economic cooperation between Vietnam and the European Union (EU) is about to turn a new page in history as the Vietnamese National Assembly is moving very close to ratifying the EU-Vietnam Free Trade Agreement (EVFTA).

 
 
 
Leave your comment on an article

OR QUICK LOGIN