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Vietnamese enterprises at risk of being acquired by foreign firms

Nguyen Kim home appliance distribution chain has been acquired by Central Retail of Thailand. 

The deal was made in June 2019, but the information was revealed when Central Retail Corporation (CRC), a subsidiary of Central Group, had an IPO on February 20, 2020.




The prospectus of the company showed that Nguyen Kim’s business results have been included in CRC’s business results since Q3 2019.

Prior to that, another Vietnamese company, Kinh Do, sold its sweets manufacturing to Mondelez International from the US, and Pho 24 was sold to Jollibee from the Philippines. Others were Bibica, sold to Lotte from South Korea, Huda to Carlsberg from Denmark, and Sabeco to Thai Beverage from Thailand.

The General Statistics Office (GSO) reported that the total value of the capital contribution deals reached $9.9 billion in 2018, an increase of 59.8 percent over 2017.

Binh Minh and Tien Phong Plastics were bought by Siam Cement from Thailand, while Hoan My Medical sold 65 percent of shares to Fortis from India.

Analysts note that takeover deals have occurred mostly in the retail sector. The trend has been growing since Vietnam began opening its retail market to foreigners.

Fivimart and Citimart cooperated with Aeon from Japan, while Family Mart, a convenience chain, was taken over by Berli Jucker from Thailand.

The General Statistics Office (GSO) reported that the total value of the capital contribution deals reached $9.9 billion in 2018, an increase of 59.8 percent over 2017.

Of this, the value of the deals of capital contribution which did not lead to charter capital increase was $5.6 billion, accounting for 57 percent.

In 2019, the total value increased sharply by 56.4 percent to $15.5 billion. Though the value of the deals of capital contribution which did not lead to charter capital increase just accounted for 40.6 percent, it was still high at $6.3 billion, up by 12 percent over 2018.

In the first two months of 2020, of 1,483 capital contribution deals made by foreign investors with total value of $827 million, there were 1,318 deals, or 83 percent, worth $544 million, which did not lead to charter capital increase.

The capital contribution deals leading to an increase in businesses’ charter capital help businesses expand and diversify shareholder structure. But the impact is the reverse for deals not leading to charter capital increase.

The deals were made when domestic shareholders withdrew their capital or businesses sold their company.

The owners of some companies realized that their competitiveness was weak and decided to transfer the companies before it was too late. As for shareholders, they did not have confidence in the development potential of the enterprises.

In the case of Nguyen Kim, the retailer once led the home appliance distribution field for 20 years, but it has been outstripped by Dien May Xanh, its rival, since 2016.

Kim Chi 


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