The world’s largest brewers from Europe to Asia are lining up for a chance to buy a stake in Vietnam’s top beer-maker, in a deal worth at least US$1.8 billion as consumption in the country surges.
Dutch brewer Heineken NV, Anheuser-Busch InBev NV and its merger partner SABMiller PLC, as well as Japan’s Asahi Group Holdings Ltd and Kirin Holdings Co are among seven foreign companies that have registered to bid for stakes in Saigon Beer Alcohol Beverage Corp (Sabeco), its chief executive officer Le Hong Xanh said.
“Sabeco doesn’t care if the buyer is an international or domestic company,” Xanh said in an interview at the company’s Ho Chi Minh City headquarters. “All we care about is who will pay the most. The government wants to sell its stakes as soon as possible.”
The deal is garnering interest from foreign beer brands attracted by Vietnam’s young population and rising middle class in one of the world’s fastest-growing economies.
The government is divesting stakes in its two market-leading brewers as a growing budget deficit forces the leadership to accelerate a plan to reduce holdings in state-owned firms.
Thailand’s Singha Asia Holding Pte and Thai Beverage PCL have also signed up to take part in the Sabeco auction, while Vietnamese brokerage Saigon Securities Inc has joined the latest list of local potential buyers, Xanh said.
Bidders will need to register again as the process begins, as interested buyers had signed up prior to April, before Vietnam’s new prime minister took over running the government, Xanh said.
Companies could drop out or more could join the list, he said.
The Vietnamese Ministry of Industry and Trade on Aug. 31 announced the government’s plan to sell its entire 89.59 percent stake in Sabeco, which it has valued at US$1.8 billion, and its 82 percent holding in Hanoi Beer Alcohol Beverage Corp for US$404 million.
Sabeco is to be sold in two tranches this year and next, while Hanoi Beer, or Habeco, will be divested this year, it said.
“There aren’t that many markets where foreign brewers would have a chance to secure an interest in a market-leading brewer,” said John Ditty, managing partner of KPMG Vietnam’s deals advisory unit.
The government’s valuation of its stake is not “too much,” he said in an interview in Ho Chi Minh City.
Sabeco has strong brands and an existing distribution network, so what investors “have to decide is how much of a premium that is worth,” Ditty said.
The brewer expects net income to rise 10 percent to about 3.76 trillion dong (US$169 million) this year, from 3.42 trillion dong last year, double its target growth rate for the year, Xanh said.
Some of the government’s stake in Sabeco will be listed on the Ho Chi Minh City Stock Exchange in as soon as 45 to 60 days, Xanh said.
After that, the government will auction 53.59 percent in the company within the year, and the remainder next year, he said.
The proportion to be offered publicly will be decided by the ministry, he added.
The government wants the market to determine the price of stakes in Sabeco, and its listing will be overseen by Maybank Kim Eng Securities Thailand PCL, Xanh said.
Sabeco, brewer of Saigon Beer and 333 Beer, prefers to have several major shareholders, and its auction could attract more domestic companies, some of which could form joint ventures to pool resources for their bids, Xanh said.
He declined to name other interested local parties.
Foreign brewers are raising their stakes in Vietnam as beer consumption in the country rose 6 percent last year and is expected to keep growing until 2020, according to Euromonitor International.
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