Thai billionaire eyes Vinamilk following $5b SABECO acquisition
Thai billionaire eyes Vinamilk following $5b SABECO acquisition
Charoen's journey with Vinamilk began in 2013 when his company, TTC Group, acquired Fraser and Neave, the parent company of F&N Dairy Investment. At that time, F&N Dairy Investment was already a shareholder of Vinamilk.
A customer chooses Vinamilk products to purchase. — Photo vinamilk.com.vn |
In a strategic move that underscores the growing interest of foreign investors in Việt Nam's market, Thai billionaire Charoen Sirivadhanabhakdi has reaffirmed his ambitions to increase his stake in Vinamilk, the country's leading dairy producer.
The latest developments involve a plan to acquire approximately 20.9 million shares of Vinamilk, with an estimated investment of around VNĐ1.3 trillion. The transaction is scheduled to take place between January 17 and February 14, through a combination of negotiation and order matching.
Charoen's journey with Vinamilk began in 2013 when his company, TTC Group, acquired Fraser and Neave, the parent company of F&N Dairy Investment. At that time, F&N Dairy Investment was already a shareholder of Vinamilk.
Over the years, this investment has proven lucrative, with Charoen reportedly earning nearly VNĐ15 trillion (US$591 million) in dividends since he first entered the market.
The Thai billionaire's interest in Vinamilk has persisted through various market conditions, demonstrating a long-term commitment to the Vietnamese dairy sector.
Despite attempts to increase his holdings, F&N has faced challenges in executing substantial purchases. The persistence of Charoen in pursuing Vinamilk highlights the company's stability and growth potential.
Vinamilk's history of robust performance, marked by consistent dividend payouts ranging from 40 per cent to 60 per cent annually, makes it an attractive target for investors seeking reliable returns.
This interest comes on the heels of his recent $5 billion acquisition of SABECO, the country's largest brewer, marking a significant expansion of his investment portfolio in the region.
The acquisition of SABECO, through Vietnam Beverage (a subsidiary of Thaibev), is a bold testament to Charoen's ambitions in Việt Nam.
Although this investment has seen a substantial paper loss estimated at $3.5 billion, Charoen remains undeterred. His long-term vision for dominating the Vietnamese beer market aligns with broader regional aspirations in Southeast Asia.
Nevertheless, SABECO continues to generate significant cash flow, with dividends flowing back to Thaibev, which has received over VNĐ12 trillion in dividends since the acquisition.
This financial return provides a cushion for the initial losses incurred and reinforces the rationale behind Charoen's aggressive investment strategy.
With increasing foreign interest, including from Thai investors, the competitive landscape in Việt Nam's beverage sector is likely to intensify.
This could lead to accelerated innovation and improvements in operational efficiencies as domestic companies respond to increased pressure from well-capitalised foreign players.
