VN tycoon considers major deal, competes with foreign rivals in $10bil market segment
Masan Group billionaire Nguyen Dang Quang is considering a billion-dollar deal in an area that is Vietnam's strength but has been controlled by large foreign corporations for the past decade.
According to Bloomberg, Masan Group (MSN) plans to raise US$1 billion by selling its shares to strategic partners to invest in animal feed production through its subsidiary Masan MeatLife (MML).
According to this source, Masan is also thinking about organizing an initial public offering (IPO) for the animal feed business of Masan MeatLife, as it believed that Masan MeatLife (MML) is undervalued by the market.
Currently, the price for MML is VND61,000 per share, with a market capitalization of nearly VND20 trillion (about $850 million).
This price is said to be lower than the business value. In 2017, KKR spent $150 million to buy a 7.5% stake in Masan MeatLife, equivalent to a business valuation of about $2 billion.
The agricultural sector has seen interest from Vietnamese tycoons after a decade of being dominated by foreign firms. Many large private groups in Vietnam have poured money into this field, such as Masan, Dabaco (DBC) of Mr. Nguyen Nhu So, or Hoa Phat Group of the billionaire Tran Dinh Long.
Masan Group currently holds a 79.32% stake in Masan MeatLife. A subsidiary of Masan Group, Masan Vision Co., Ltd owns 7.95% and Consumer Meat II Pte.Ltd holds 7.14% of Masan MeatLife shares.
Masan MeatLife was formerly known as Masan Nutri-science (MNS) and its name was changed in July 2019. Masan MeatLife now owns two feed brands Anco and Proconco. The appearance of Masan MeatLife is seen as a good sign for the Vietnamese business community in the battle against foreign rivals in the domestic market, even in agriculture, Vietnam’s strong field. This market segment is forecasted to have potential value of more than $10 billion.
More than a decade ago, Thai investors began investing in the Vietnamese agricultural market. Charoen Pokphand Group (C.P. Group) of Thai billionaire Chearavanont has strongly invested in production of animal feed, chickens, pigs, eggs and agricultural produce processing.
After four years of establishment, Masan MeatLife has earned huge revenue. Its distribution system has grown by more than 10 times to nearly 500 units after a short period of time.
In late 2019, Masan’s Chairman Nguyen Dang Quang shocked the market when acquiring Vingroup's retail and agriculture segments, creating a billion-dollar retail "empire" in Vietnam.
Vinmart's retail chain has the largest coverage in Vietnam with nearly 100 supermarkets and 2,500 Vinmart/Vinmart+ stores in cities across the country.
In the latest news, Masan Group Corporation and a consortium, including Chinese e-commerce giant Alibaba Group and Baring Private Equity Asia, on May 18 announced the signing of agreements for the acquisition of a 5.5 percent stake in The CrownX for a cash consideration of $400 million.
The CrownX, founded in 2020, is valued at $6.9 billion, equivalent to $93.50 a share. Parent company Masan will hold 80.2 percent of the retail unit. The company is Masan’s integrated consumer retail arm that consolidates its interests in Masan Consumer Holdings (MCH) and VinCommerce (VCM).
As a part of the transaction, VCM will enter a strategic cooperation agreement with Lazada, Alibaba’s Southeast Asian e-commerce platform. It will be the grocery retailer of choice on Lazada in Vietnam.
Over the years, big investors from South Korea, Japan and China have poured billions of US dollars into Vietnam’s banking and finance, real estate, consumer goods and pharmaceutical industries.
Previously, investors saw two outstanding deals: SK Group spent $1 billion to purchase a 6% stake in Vingroup of billionaire Pham Nhat Vuong and $470 million to buy a 9.4% stake in Masan Group.
Hanwha Group - the 7th largest economic group in South Korea – in late 2019 expanded in the Vietnamese market. After investing in insurance and investment sectors, the Korean giant jumped into the securities sector with the appearance of Pinetree Securities.
Another Korean investor - STIC Investments - has poured capital into large enterprises in Vietnam. Some Korean funds and corporations are also reported to invest in Vietnam such as KIM fund, JB Financial Group, KB Financial Group Inc, Mirae Asset...
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