On the morning of December 3, 2019, Vingroup and Masan Group announced the principle agreement on the swap of shares of VinCommerce Company and VinEco Company. The deal between the two billionaires has shown a good example of M&A trends in recent years.
According to the report "Trends in M&A of Consumer Goods - Retail: The race for strategic transformation and strategic growth in 2019", KPMG assesses, M&A in this field is focusing on three main trends:
Retailing giant Empire Company Ltd (Canada) in September 2018 said it would buy Farm Boy's grocery farm for $ 800 million from Boston Berkshire Partners LLC and its shareholders.
Empire owns the grocery store chain Sobeys Inc. and FreshCo Ltd. and the Lawtons pharmacy chain. Farm Boy aims to be the best brand with absolute loyalty, committed to serving healthy, fresh and ready-to-eat foods.
Another billion-dollar deal is Supervalue Inc., which merged $ 2.9 billion with United Natural Food in September 2018. The deal created a diversified food distributor, serving both traditional and modern food groceries.
One of United Natural's main customers is Whole Food. "With our leading position in organic food and the presence of Supervalue in fast-rotating products - we will become the partner of choice for more customers." says Steve Spinner - United Natural's CEO said.
Specifically, in the case of the recently announced deal in Vietnam, the agreement was stated by the parties to optimize the strength of each party's activities, and at the same time create a Consumer Goods - Retail Group. Only Vietnam has outstanding competitiveness and leading scale, consistent with the optimization of the portfolio as KPMG said.
The joint venture among the parties will own a network of more than 2,600 supermarkets and VinMart & VinMart + stores in 50 cities and provinces with millions of customers; a system of 14 high-tech VinEco farms and resources and 20 years of experience of Masan. As such, Masan has a leading distribution system of Vincommerce, while VinEco will gain consumer production experience from its partner Masan.
With VinEco investing heavily in high-tech agriculture, supporting smallholders to promote clean agriculture, for the purpose of ensuring long-term health for Vietnamese people, the name VinEco in this venture is also a way to show a healthy, safe image.
"The accession of VinCommerce and VinEco not only resonates and adds value to Masan's core competencies, but also helps us quickly achieve our goal of becoming the leading domestic Consumer and Retail Group, heading towards the international market” - Mr. Truong Cong Thang, Chairman of Masan Consumer Corporation, spoke about the cooperation between the retailer and the largest consumer goods manufacturing company in Vietnam.