After two years of delay, Vinapharm resumed its plan to sell shares to attract capable investors. The Ministry of Health (MOH) plans to divest 35 percent of shares in 2019 and another 30 percent in 2020.

The divestment of Vinapharm will be a great opportunity for foreign investors to penetrate the Vietnamese pharmaceutifical sector.

Michal Jacob from KPMG Vietnam commented that the divestment will catch the attention of strategic investors with powerful financial capability who are seeking opportunities to approach the Vietnamese market.

Vinapharm is one of the best pharmaceutical firms holding strategic positions in the market, with large distribution networks. It is one of very few Vietnamese companies carrying out R&D and it serves as the ‘backbone’ of the industry.

Vinapharm is a large corporation with 23 subsidiaries and affiliates. It had an IPO in 2017.

Vinapharm now has two shareholders which are holding 82 percent of charter capital. MOH holdims 65 percent, while Viet Phuong Group 17 percent. It contributes to many profitable companies such as OPC, Imexpharm, Mekophar and Vidiphar.

Vinapharm is more attractive in the eyes of foreign investors because of the decision to divest all the state’s shares in the company. Most investors want to obtain the right to control enterprises when contributing capital to them, and they want to have ownership ratios high enough to do this.

All the M&A deals made before attracted foreign investors, including multi-national corporations. Abbott, for example, successfully acquired 51.7 percent of charter capital of Domesco, while Taisho Pharmaceutical Holdings from Japan wrapped up the deal to raise its ownership ratio in Hau Giang Pharmacy to 50 percent.

Asked about strategic solutions to attract foreign investors, a senior executive of Vinapharm said the company will focus on production and business rather than financial investments as previously.

Michal Jacob said investors hope that the implementation of Decision 1232 in 2017 on approving the list of state-owned enterprises to undergo divestment in 2017-2020 will still be a top priority.

The interests of foreign investors will depend primarily on the state's efforts to coordinate and apply Decision 1232, as well as to ensure the implementation of the terms and conditions that the state set earlier.

A lot of M&A deals in the pharmaceutical sector were made in recent years. After SCIC divested all of its shares, 36.35 percent of Cuu Long Pharmacy’s shares in 2014, F.I.T step by step bought shares of the company, now holding 74.61 percent of capital.

Mai Lan 

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