Vietnam: No controlling stake in Sabeco and Habeco for foreign investors?

Foreign ownership in Vietnam’s two state-owned breweries Saigon Beer Alcohol Beverage Corp. (Sabeco) and Hanoi Beer Alcohol Beverage Corp. (Habeco), which are up for sale (inside.beer, 19.4.2017), might be restricted to 49 per cent if plans of the State Securities Commission of Vietnam (SSC) proposed by the Ministry of Industry and Trade (MoIT) come true.

The restriction, which has to be submitted to Vietnam’s Prime Minister Nguyễn Xuân Phúc for approval, makes foreign bidding for Vietnam’s two leading breweries less attractive. But in view of the seize (37.8 million hectoliters of beer in 2016) and the growth of the Vietnamese beer market (+ 9.3% in 2016), foreign bidders are still lining up.

Investors, which have shown interest in the leading brewer Sabeco (16 million hectoliters,  + 7.4% in 2016) are Heineken, San Miguel, Thai Beverage Public Company, and the two Japanese brewing groups Asahi Group Holdings and Kirin Holdings.

Carlsberg Breweries is said to be the frontrunner in the privatization of Habeco  (7.2 million hectoliters, +2.1% in 2016) because the Danish brewing group holds already a 17.51% share in Vietnam’s second largest domestic brewer. However, Carlsberg is currently not willing to pay the full market price (VND83,000, or $3.65, per share) which delays a final decision.

Lately it became known that the largest Australian brewer Carlton & United Breweries (CUB), which is part of AB InBev, also expressed interest in becoming a strategic investor of both Sabeco and Habeco.

Based on current market values, foreign investors will have to spend a respective capital of VND77 trillion ($3.39 billion) and VND10 trillion ($440.9 million) on purchasing dominant stakes in the two leading breweries.

 

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