Big foreign firms hit brick wall trying to take over Vietnamese supermarkets
Big foreign firms hit brick wall trying to take over Vietnamese supermarkets
Powerful foreign businesses are encountering obstacles in their attempts to acquire Vietnamese retailers.
Aeon, for example, has attracted the local media’s special attention with the news that the Japanese group has decided to inject money into two large Vietnamese retail chains – Fivimart and Citimart – with 20 and 27 supermarkets, respectively.
Once the deals wrap up, Aeon would hold a 30 percent stake in Fivimart and 49 percent of Citimart’s shares.
Analysts noted that Vietnamese retail chains are being swallowed up by big tycoons from Asia.
In 2013, the Thai billionaire Charoen Sirivadhanabhakdi took over Family Mart.
And the Thai BJC Group in August 2014 announced that the group and the German Metro Group had reached an agreement on the transfer of the Metro chain, with 19 distribution centers, in Vietnam to BJC.
South Korean Lotte, which stirred up the public with the attempt to acquire Bibica, a sweets manufacturer, and the construction of the second highest building in Hanoi – Lotte Tower – reportedly bought Pico Plaza in an effort to expand its business in Hanoi.
However, sources said the “big sharks” at times could not implement plans smoothly.
Lotte drew up many development plans after taking over Pico Mall. However, its decision to acquire Pico was no praised by analysts.
Knight Frank Vietnam said that Lotte made an “adventurous deal” when buying Pico, and that is was not a big success as expected.
Lotte Mart has been witnessing unsatisfactory business results with very few customers. Sometimes the retailer even faces accusations of selling substandard products.
Japanese Aeon, which is planning to pour money into Fivimart and Citimart, is also a big shark. However, it did not succeed in the cooperation deal to develop G7 Mart Ministop, together with the big Vietnamese company, the Trung Nguyen Group.
In 2011, Aeon joined hands with Trung Nguyen to set up a joint venture to develop a mini mart chain, in which it held a 25 percent stake. However, G7 Mart Ministop is still not a big name in the distribution market.
It is still unclear if BJC’s plan to buy Metro Vietnam will succeed. In the latest news, local newspapers reported that BJC’s shareholders are against the deal of taking over the German distribution chain worth $879 million.
The shareholders fear that BJC would face high financial risks and lawsuits because of the complicated provisions of the payment method.
A Thai newspaper quoted a senior executive of BJC as saying that BJC may have to seek huge capital of 1.31 billion euros to fulfill the acquisition deal.
