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Top 10 M&A deals in 2019

Friday 27, 12 2019
Most of major M&A deals in 2019 were in the fields of consumer goods, retail, finance, banking and real estate.
Top 10 M&A deals in 2019

1. SK Group spent USD1 billion for 6.15% of Vingroup's charter capital

On May 16, 2019, in Hanoi, Vingroup and SK Group officially signed a cooperation agreement, under which, SK invested USD1 billion in Vingroup and would become a strategic partner of this group.

Five days after the agreement was signed, the Korean giant completed the transaction. Through SK Investment Vina II, SK Group acquired 205.7 million VIC shares, equivalent to 6.15% of Vingroup's chartered capital, becoming the third largest shareholder of this group, following Vietnam Investment Group Joint Stock Company (31.83% of charter capital) and billionaire Pham Nhat Vuong (26.18% of the charter capital).

2. DHG Pharmaceutical was bought by a Japanese company

On April 25, 2019, DHG Pharmaceutical Joint Stock Company (HoSE: DHG) announced that Taisho Pharmaceutical Manufacturing Joint Stock Company had bought a total of 20.6 million shares out of 28.3 million shares that were publicly bid, thereby raising the holding shares to nearly 66.4 million units, equivalent to the ownership rate of 50.78%. Accordingly, DHG Pharma officially became a subsidiary of Taisho.

This is a deal that Taisho had pursued for many years and must spend trillions of dongs to become a controlling shareholder in this Vietnamese drug manufacturer. In February 2019, before raising its ownership in Hau Giang Pharmaceutical to nearly 51% of the capital, Taisho also registered to buy 925,200 DHG shares through negotiation or matching orders.

Taisho is a Japanese enterprise established in 1912, with a charter capital of about 30 billion Japanese Yen, equivalent to more than VND6,200 billion. The company also owns 10 subsidiaries, 1 affiliate company and 8 manufacturing plants in Japan. Currently, this business is one of the 5 largest pharmaceutical corporations in Japan with total assets of billions of dollars and a wide branch network throughout Asia.

3. Saigon Co.op acquires Auchan Vietnam

Although the value of this deal has not been disclosed, it is one of the most outstanding deals in 2019 because it is very rare for a domestic enterprise to acquire a foreign one.

Auchan Retail has been present in Vietnam since 2015, cooperating with large real estate corporations to build supermarkets right in the investor's apartment buildings which are densely populated and people’s income is medium and stable. Due to such great potential, Auchan once planned to invest USD500 million in the Vietnamese retail market.

However, in June 2019, a series of Auchan stores suddenly closed. On the night of June 27, Auchan unexpectedly announced to transfer its all retail activities in the Vietnamese market to Saigon Co.op.

4. Mitsui purchased more than 35% of Minh Phu Hau Giang's shares

Mitsui spent USD153 million on this deal. Minh Phu is not only one of Vietnam's major seafood producers, it is also known as the world's largest integrated shrimp producer from farming to processing and sales.

Mitsui started investing in Minh Phu in 2013 by pouring capital into Minh Phu Hau Giang Seafood Joint Stock Company (MPHG), a processing factory of Minh Phu. Since then, Mitsui has contributed to optimizing the management and operation of MPHG. Through investing in the parent company, Mitsui will be able to apply development initiatives at MPHG to the entire Minh Phu Group and take advantage of the established sales network.

Mitsui is one of the 5 largest Japanese companies. Shaking hands with Mitsui, Minh Phu aims to capture 25% of the global shrimp market share in the next 15-20 years (currently reaching 5%). The Group is focusing on proactively self-supplying raw materials with good quality and low prices.

5. Gelex gradually acquired Viglacera

In early May 2019, Gelex Electrical Equipment Co., Ltd., a subsidiary of Vietnam Electrical Equipment Joint Stock Corporation (Gelex), announced to complete the purchase of 27 million shares of Viglacera due to divestment by the Ministry of Construction.

After this deal, Gelex group officially increased its ownership in Viglacera to nearly 25%, moving closer to the target of acquiring this giant construction and real estate company.

Currently, the Ministry of Construction still holds more than 38% of capital in Viglacera. The Ministry planned to divest the remaining capital in 2019. However, so far, no divestment information has been shared.

6. BIDV sold over 603 million shares to KEB Hana Bank

On November 1, 2019, BIDV announced to complete selling more than 603 million shares to its Korean partner, KEB Hana Bank, at the price of VND33,640 per share. The above number of shares corresponds to 15% of BIDV's charter capital.

The total value of this deal is VND20,208 billion, equivalent to USD882 million. Thanks to this deal, BIDV's chartered capital has increased to VND40,220 billion, equivalent to more than 4 billion shares. KEB Hana has become the second largest shareholder in BIDV, following the State which currently holds 81% of the bank's charter capital.

Currently, corporate customer loans account for more than 70% of loans at BIDV and the bank is looking to improve its strength in the retail segment in the near future. Meanwhile, KEB Hana, operating two branches in Vietnam, is also seeking opportunities to attract more Vietnamese customers through cooperation with BIDV.

BIDV sold over 603 million shares to KEB Hana Bank

7. Samsung SDS became the largest shareholder of CMC

On August 24, 2019, CMC Corporation (HoSE: CMG) announced the completion of issuing 25 million shares to Samsung SDS. With the selling price of VND 34,000 / share, the proceeds reached VND850 billion. After deducting the issuance advisory fee, stock valuation and consulting lawyer fee, CMC received a net of VND848.74 billion.

After the deal, Samsung SDS became the largest shareholder, owning 25% of CMC's charter capital. In addition, CMC also has two major shareholders including MVI Investment Limited Company (14.49%) and Geleximco Group (10.46%).

8. Thai businesswoman acquired Duong River Surface Water Company

In early November, a Thai enterprise, WHA Utility and Power, said that the company had signed a share purchase agreement with Mr. Do Tat Thang, a shareholder of the Duong River Surface Water Company through its subsidiary, WHAUP. (SG) 2DR Pte. Ltd.

WHAUP (SG) 2DR acquired nearly 34 million shares from Mr. Thang, equivalent to 34% of the charter capital of Duong River Surface Water Company. The agreed price was about 61,000 dong / share. Thus, the Thai company spent over VND 2,073 billion on the above deal.

WHA Utility and Power is a member of WHA Group (Thailand), specializing in logistics, and industrial utilities and energy services. In particular, the company's co-founder and largest shareholder is female entrepreneur Jareeporn Jarukornsakul.

9. VinCommerce, VinEco sold to Masan

On December 3, 2019, Vingroup and Masan Group agreed on exchanging shares of VinCommerce and VinEco. This is considered as the most surprising deal in 2019.

According to the agreement, Vincommerce General Commercial Services Joint Stock Company (retail), VinEco (agricultural), Masan Consumer Holding (consumer) will be merged to establish a leading consumer - retail group in Vietnam. Accordingly, Vingroup will swap all shares in VinCommerce into shares of the new company after the merger. Masan Group will take control of the operation while Vingroup is only a shareholder.

VinCommerce, VinEco sold to Masan

10. Vinamilk purchased 75% of capital at GTNFoods

In the last days of 2019, Vinamilk (VNM) announced that it had purchased an additional 79.6 million GTN shares of GTNFoods Joint Stock Company (GTN), raising its ownership in this company from 43.17% to 75%.

The acquisition of GTN will bring some benefits to VNM in the long term such as increasing market share (GTN's dairy subsidiary, Moc Chau Milk, currently records an annual milk sales of about USD107 million). At the same time, VNM will be able to increase domestic milk supply thanks to GTN's dairy herds as well as the potential land fund to expand dairy farming. In addition, this deal also makes it impossible for Vinamilk’s competitors to acquire Moc Chau Milk.

Read more: Banking industry: expected M&A deal

Compiled by VietnamCredit

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Business

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