VietNamNet Bridge - Though both sides put high hopes on the deal, Pham Dinh Nguyen, the first Vietnamese to own a town in the US, and the founder of the Phindeli coffee brand, and Tran Kim Thanh, the emperor of the Kinh Do sweets kingdom, have failed to implement a deal on instant coffee and other products.

The news about the Phindeli – Kinh Do M&A deal appeared in all local newspapers one year ago. Pham Dinh Nguyen, Phindeli, Tran Kim Thanh and Kinh Do were all well known brands.

Analysts said that Nguyen and his co-workers were looking for an investor who could help them develop instant coffee products after succeeding with roasted coffee.

Nguyen had been running his roasted coffee distribution network smoothly with sale points at supermarkets and big shops in large cities, mostly in HCM City. 

However, in order to distribute instant coffee, Nguyen would need a larger distribution network throughout the country.

The Vietnamese instant coffee market is dominated by big players such as Trung Nguyen, Nestle and Masan. The competition in the market is very stiff and it would be not easy for newcomers.

Cooperating with Phindeli proved to be a good choice for Kinh Do, which then decided that coffee, instant noodle and vegetable oil were the three key business fields that Kinh Do would target.

Nguyen, speaking to local press, said the M&A deal was a reasonable choice of the two parties. One had a good brand (Phindeli) and the other had a large distribution network (Kinh Do). 

However, the deal failed at the last minute.

The two sides denied that they failed because they could not agree on the price.

“The moment when we discussed the cooperation was the time Kinh Do was busy with its deal with Mondelēz (the US sweets manufacturer which later bought Kinh Do’s sweets production unit). At that time, cooperating with Phindeli was not the top priority for Kinh Do,” Nguyen said.

“There are few opportunities for Phindeli products to integrate into Kinh Do’s distribution network. This was the main reason for the two sides’ cooperation,” he said.

Phindeli has joined forces with foreign distributors to bring Phindeli products to large supermarket chains such as Coomart, Citimart and Hapro, and has been trying to sell products at traditional markets, shops and retail points.

Since the deal failed, both Kinh Do and Phindeli have been looking for new partners.

An analyst noted that Kinh Do has not ‘given up coffee’, but that it would not be easy to find partners for M&A. Besides the big players such as Trung Nguyen, Nescafe and Vinacafe Bien Hoa, belonging to Masan, only small brands run by small private establishments are available for Kinh Do to buy.  

NCDT