Powerful conglomerates win duels with foreign players
Many Vietnamese tycoons have won battles with foreign businesses, successfully preventing foreigners’ hostile takeover attempts.
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The fierce competition between Vietnamese firm PAN and the Republic of Korea's Lotte for Bibica sweets brand ended when PAN bought 1 million Bibica shares and raised its ownership ratio in Bibica to over 50%.
With the deal, PAN, owned by Nguyen Duy Hung, a respected businessman, has become the biggest shareholder in Bibica with the share proportion far higher than 44% being held by Lotte Confectionary.
The happy ending for Vietnamese shareholders was unpredicted. They thought that Bibica would be swallowed by Lotte, a giant from the Republic of Korea, like Da Lan toothpaste and Tribeco soft drink were by foreign investors, with their more powerful financial capability and experience.
A Bibica representative admitted that it was a big mistake to cooperate with Lotte. The cooperation could not go smoothly because Lotte just wanted to turn Bibica into its subsidiary which makes products for it instead of developing new products of its own.
However, the appearance of Hung and PAN has made Lotte’s plan fail.
In late March 2016, Anco, a subsidiary of Vietnam Masan Group, unexpectedly defeated CJ CheilJedang from the Republic of Korea to get the rights to buy a 14% stake of Vissan, worth VND1.4 trillion.
CJ, a ‘brother’ of Samsung Group, missed the opportunity to acquire shares of the biggest food slaughterhouse and supplier. Prior to that, CJ spent hundreds of billions of dong to acquire 4.2% of Vissan’s stake in the IPO.
In 2011, Masan unexpectedly announced it successfully took over Vinacafe Bien Hoa, the instant coffee brand with the largest market share. The quick move by Masan helped it gain the advantage and obtain the overwhelming majority shares at Vinacafe Bien Hoa in comparison with foreign investment funds, namely Hongkong GaoLing Fund, Templeton Frontier Markets Fund and Barca Global Master Fund, L.P.
Relating the story about Bibica, Hung affirmed he will continue towards the goal he set in 2013 – building up a powerful Bibica and protecting the Vietnamese brand.
PAN Food now holds the controlling stake in Bibica, Lafooco and Aquatex Ben Tre.
Analysts commented that Hung’s success has helped Vietnamese sweets manufacturers retain a small piece of the market, which is worth US$1 billion.
They said that they can see big changes in the M&A panorama in Vietnam. In the past, most of the buyers were foreign conglomerates, but more Vietnamese buyers have appeared recently in big deals and acquired well-known foreign invested projects.
Investors witnessed BRG Group of Nguyen Thi Nga taking over Hilton, Thien Minh Group of Tran Trong Kien buying Victoria, and Sovico Holdings of Nguyen Thanh Hung buying Furama Resort Danang.
