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Thai Bev's local vehicle bids for Sabeco

Released at: 11:01, 12/12/2017

Thai Bev's local vehicle bids for Sabeco

A production line of Sabeco. Photo from customsnews.vn

Vietnam Beverage Co. meets deadline in declaring interest in 25% or more of Vietnam's largest brewer.

by Quang Huy

A unit of Thai Beverage has emerged as a prospective bidder for State-owned shares in the Saigon Beer Alcohol Beverage Corp. (Sabeco), a declaration that may indicate it seeks 25 per cent or more of Vietnam’s largest brewer, the Ministry of Industry and Trade (MoIT) said on December 11.

Investors who want shares that would lead to ownership of 25 per cent or more in Sabeco have to inform local authorities and publicize the information a week before the auction date, which is set for December 18, according to the rules of the offer.

The trade ministry said in a statement that as at 6pm on December 11, the one prospective investor that has registered an interest in buying 25 per cent or more of Sabeco that has publicized the information is the Vietnam Beverage Co., owned by the Vietnam F&B Alliance Investment Co., which is 49 per cent owned by BeerCo Ltd, an indirect but wholly-owned subsidiary of Thai Beverage.

Late last month, MoIT said it will sell a majority stake in Sabeco in an ambitious deal it hopes will rake in at least $5 billion. Foreign investors are limited to a 38.59 per cent stake in the brewer, with some 10 per cent already being foreign-owned, with the remainder held by the State.

The auction has attracted interest from 15 large foreign investors, including Asahi and Anheuser-Busch, Sabeco’s Chairman Mr. Vo Thanh Ha said. The shares will be offered in a single tranche.

Head of MoIT’s Industry Department Mr. Truong Thanh Hoai said he expects Anheuser-Busch to show keener interest in Sabeco as it needs to expand its local market share, while Heineken, with a 5 per cent stake in Sabeco, may not want to spend a huge amount as it already has a considerable slice of the market. The government won’t relax the stake limit it has set for foreign investors, he said.

MoIT, which represents State shares in Sabeco, said foreign investors can link up with Vietnamese firms to buy shares in Sabeco, but have to comply with local laws and regulations.

The sale, which officials originally hinted might happen at the beginning of this year, is part of the government’s equitization push as it seeks to rein in mounting public debt. As part of the promised reform, shares of several State-owned enterprises (SOEs) are to be sold off, though plans have repeatedly stalled.

With a population of 95 million people, Vietnam is one of Asia’s leading per capita beer drinkers. Crown jewels Sabeco and fellow State-owned firm the Hanoi Beer Alcohol and Beverage Corp. (Habeco) are the country’s leading brewers, though some foreign players such as Heineken, Carlsberg, and Sapporo also have a strong foothold in the market.

Dizzying economic growth has seen per capita incomes in Vietnam more than double in the past decade to over $2,200 today, with newfound disposable incomes largely spent on consumer goods.

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