Metro transfer deal not yet on table of HCMC investment authority
Metro transfer deal not yet on table of HCMC investment authority
Metro Cash and Carry Vietnam has not submitted a file to the HCMC Department of Planning and Investment for transferring its wholesale chain to Thailand’s Berli Jucker Public Company Limited (BJC).
As Metro Cash and Carry Vietnam is headquartered in HCMC, if it is transferred to BJC, the transfer request should be submitted to the department for assessment before it forwards the document to relevant ministries for consideration and decides on an adjustment of its investment license.
Last August, Metro announced the transfer of its Cash & Carry wholesale chain and related real estate portfolios in Vietnam to BJC. However, a source from the DPI told the Daily last week that it had not received any proposal for the deal.
According to a source of Metro Cash & Carry Vietnam, the acquisition was negotiated by leaders of Metro and BJC and Metro Cash and Carry Vietnam just executes the deal. So official information concerning the case should be announced by the group in Germany.
The source said business is as usual at Cash & Carry wholesale stores across Vietnam and Vietnamese products make up more than 90% of the items there.
The later-than-expected completion of the transfer might have resulted from opposition of BJC shareholders earlier this year.
As reported by Bangkok Post, at a shareholders’ meeting early this year, shareholders of BJC voiced concerns over high financial and legal risks for the deal worth 25 billion baht (655 million euros).
Later, Thailand’s TCC Holding, the largest shareholder of BJC, said it would enter into talks with Metro Group to renegotiate conditions for buying the Metro Vietnam unit.
TCC Holding plans to acquire Metro Cash and Carry Vietnam by itself if BJC shareholders reject a renegotiated deal.
Controlled by Thai billionaire Charoen Sirivadhanabhakdi, TCC Holding holds a 73.7% stake at BJC but the deal to acquire Metro Vietnam is only done when it is approved by 75% of BJC’s shareholders.
According to market analysts, with its determination to penetrate the Vietnamese retail market, TCC would not easily give up its acquisition plan.
Earlier, an executive at BJC said BJC and the German group reached an agreement for the acquisition after more than one year of negotiations with support of the U.S.’s Lazard. He added that 655 million euros (US$875 million) is reasonable for the deal.
Explaining the deal, BJC said it saw huge potential in product and service distribution in Vietnam and Metro Cash and Carry Vietnam was a good opportunity for it to enter this market. The strong foothold and nearly 4,000 well-trained employees of the wholesaler can help BJC grow faster than setting up a new business.
The Vietnamese tax authority requested Metro Cash and Carry Vietnam to reduce losses by over VND500 billion and pay VND62 billion in tax after news broke that the company would be sold to BJC.
Metro Cash and Carry Vietnam has opened 19 wholesale stores and two fresh vegetable and fish distribution centers, mainly in big cities in Vietnam, since it was established more than 10 years ago.
