17:27 (GMT +7) - Tuesday 12/12/2017

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Masan Beverage eyes 100% of Vinacafe Bien Hoa

Released at: 17:42, 05/12/2017

Masan Beverage eyes 100% of Vinacafe Bien Hoa

Photo: Internet Archive

Masan Consumer subsidiary announces plan to increase current 68.5% holding.

by Ngoc Chi

Masan Beverage, a wholly-owned subsidiary of fast-moving consumer goods giant Masan Consumer, has announced an offer to buy 100 per cent of the Vinacafe Bien Hoa Joint Stock Co. (VCF).

With an expected price of VND202,000 ($8.9) per share, the cost of the deal is estimated at VND1.7 trillion ($75.2 million).

Masan Beverage currently owns 18.2 million shares, or 68.5 per cent, in Vinacafe Bien Hoa. If the transaction is completed in the first quarter of 2018, Masan will own 100 per cent and dislodge GaoLing Fund (Hong Kong) and YHG Investment, which own 6.5 million shares, or 25.5 per cent, in VFC.

At the same time, the Board of Directors at VCF has also decided to advance a dividend of VND66,000 ($2.9) per share from an expected undistributed profit of about VND2 trillion ($88.4 million) as at December 31, 2017.

Masan Consumer’s management board believes that coffee and coffee products will be key in the beverage industry’s strategy of the company and create “high added value” for the coffee industry in Vietnam.

By acquiring an additional 30 per cent stake in VCF, Masan’s profit is expected to increase due to the reduction in a minority interest. In addition to significantly improving net margins, the transaction will also bring more cash flow to Masan and streamline its consolidated balance sheet as well as the Group’s structure, in line with the target of reducing earnings before interest, taxes, depreciation and amortization (EBITDA) in the next three years.

Masan Beverage is a subsidiary of Masan Consumer Holdings within the Masan Group and operates in the non-alcoholic beverages segment. Besides holding shares in VCF it also holds some 65 per cent of the Quang Ninh Mineral Water Company and 63.95 per cent of the Vinh Hao Mineral Water Company.

VCF began as the Coronel Coffee Plant in 1969. It created the instant coffee brand Vinacafe, which has gained international stature. Vinacafe Bien Hoa was then acquired by the Vietnam National Coffee Corporation (Vinacafe).

VCF is the leading instant coffee manufacturer in Vietnam with a 41 per cent market share and with strong brands such as Vinacafe and Wake-up, according to a Nielsen Vietnam report.

The company has successfully expanded the brand name Wake-up 247, a type of energy drink with a coffee taste that accounts for 5 per cent of the energy drink market in Vietnam, with growth of 58.3 per cent in the first nine months of 2017.

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