2016’s top 5 largest M&A deals in Vietnam

Central Group acquires Big C Vietnam

In April, Thai company Central Group overcame numerous large-scale groups like the Republic of Korea's Lotte, Thai Berli Jucker, and Dairy Farm from Singapore to officially become the new owner of Groupe Casino’s Big C Vietnam for US$1.14 billion.

After the deal, Central Group took over Big C’s network of 43 stores and 30 shopping centres across the country. Central Group, in partnership with the Vietnamese Nguyen Kim Group, will continue Big C Vietnam’s strategy concerning the supply of goods produced in Vietnam for Big C stores.

Central Group’s purchase of Big C Vietnam is not only the largest M&A deal in Vietnam this year, but also marks a massive penetration by Thai goods into the Vietnamese market.

However, the deal is also attached to scandals of delay in transfer tax payment. 

Notably, as of June 20, nearly two months after the transfer took place, the local authorities had yet to receive the declaration of tax payment of the deal, while under the provisions of Vietnamese law the deadline for submission is the 10th day after the transfer is officially completed. 

Central Group said that it had no obligation to declare and pay tax on the deal, while Casino Group and the management board of Big C Vietnam refused to comment.

The debacle went on until late August, when Central Group paid off the whole VND2.034 trillion (US$93 million) it declared in tax earlier.

The deal between Thai TCC Holdings and German Metro Group

In early 2016, Thai company TCC Group, the largest investor in Berli Jucker PCL (BJC), completed the purchase of Metro Cash & Carry Vietnam from German Metro Group. The deal was valued at US$710 million.

TCC thereby acquired Metro Group’s complete wholesale operations in Vietnam, including all 19 wholesale markets, the related real estate portfolio for an enterprise value of €655 million (US$711 million), a vegetable and fruits distribution centre in Lam Dong, and a fish distribution centre in Can Tho, as well as two office supplies distribution centres in Ho Chi Minh City and Hanoi.

After the purchase, TCC Holdings renamed the brand as MM Mega Market.

TCC chairman Charoen Sirivadhanabhakdi said that the group would develop the MM Mega Market chain together with the Big C supermarket chain in Thailand. In July, TCC bought 100 tonnes of Vietnamese dragon fruit to sell at its Big C Thailand stores.

The company said it would continue to export dragon fruit to Thailand at 100 tonnes per month. TCC is also looking for other fruit suppliers, such as avocado, King orange, cainito, and sweet potato. Besides, Vietnamese frozen catfish and Da Lat flowers will also appear on Big C Thailand’s shelves in the near future.

Fraser & Neave’s stake in Vinamilk

This is the newest M&A deal to date. Notably, in mid-December, F&N Beverages Manufacturing Sdn., Bhd. and F&N Dairy Investments Pte., Ltd., the two 100%-owned subsidiaries of Fraser & Neave Ltd. (F&N), spent VND11.3 trillion (US$499.56 million) on buying a total of 78.38 million shares, equalling a 5.4% stake, in Vietnam Dairy Products Joint Stock Company (Vinamilk).

After the auction, F&N increased its holding in Vinamilk to 16.35%, including the 13.65% and 2.7% stakes of F&N Dairy Investments Pte., Ltd. and F&N Beverages Manufacturing Sdn. Bhd, respectively.

It is important to note that F&N is also owned by Charoen Sirivadhanabhakdi, the chairman of TCC Holdings.

According to the latest news, F&N Dairy Investments Pte., Ltd. has registered to buy an additional 21.8 million shares, equalling a 1.5% stake, in Vinamilk. Trading is expected to be conducted based either on negotiated trade or put-through trade, from December 30, 2016, to January 27, 2017.

The deal between MobiFone and AVG

In January, telco giant MobiFone published information about the purchase of a 95% stake in Audio Visual Global JSC (AVG), the owner of An Vien Pay TV network. However, at the time, the deal’s value was not disclosed.

MobiFone made the headlines in August when Deputy Prime Minister Truong Hoa Binh officially decided to conduct a comprehensive inspection into the stellar purchase.

He assigned the Government Inspectorate to work with relevant agencies to conduct the inspection, with legal sanctions available in case any legal violation is uncovered. However, after 50 days of the inspection, the any results have yet to be disclosed.

In mid-November, the company published its financial report for 2015 and the first six months of 2016, revealing that the official value of the AVG deal was VND8.9 trillion (US$400 million). In addition, this was the only investment MobiFone made in the first half of this year.

AON Holdings’ purchase of Keangnam Landmark Tower

In mid-April, mid-sized Korean financial group AON Holdings spent US$350 million on buying Keangnam Hanoi Landmark Tower, Vietnam's tallest building, from Keangnam Enterprises.

Earlier, the bidding war surrounding the property was waged with the two strongest contenders, Goldman Sachs and Hana Financial Investment. Goldman Sachs had a keen interest in purchasing the real estate asset, but AON Holdings came late into the fray to outbid everyone.