Thai billionaire eyes Vietnamese dairy giant Vinamilk


Vinamilk, Vietnam’s largest dairy producer, has emerged as a potential target in Fraser & Neave Ltd.’s campaign to expand its Southeast Asian market share, Bloomberg reported Tuesday.

Singapore-based F&N, the beverage maker owned by Thai billionaire Charoen Sirivadhanabhakdi, sees the Vietnamese firm as an example of what the company wants in an acquisition, according to the New York-based finance website.

“[It is a firm] with market presence, well-known brands, and a strong distribution network,” explained Lee Meng Tat, F&N’s CEO for non-alcoholic beverages.

According to Bloomberg, F&N is searching for acquisitions to bolster its market share in Southeast Asia after its war chest grew to nearly US$745 million following sales of beer assets.

The planned acquisition of Vinamilk is expected to boost F&N’s competitive edge against PepsiCo Inc. and Coca-Cola Co. in Southeast Asia, Lee said.

The CEO said his company is a “distant third” to the two U.S. soft drink giants, so acquiring Vinamilk “would give [him] a much faster way into the market.”

In 2015, Vinamilk posted $1.8 billion in revenue, up 14 percent year on year and close to its $2 billion target.

F&N had $720.79 million in cash and cash equivalents as of the end of June, according to Bloomberg. The company already holds an 11 percent stake in Vinamilk, making it the second biggest shareholder, behind the Vietnamese government’s 45 percent.

In July, Vinamilk announced that the government had allowed it to scrap the 49 percent cap on foreign holding, according to newswire Dan Tri (Intellectual). This means foreign ownership at the company, valued at some $8.4 billion, can be up to 100 percent.

Lee, the F&N CEO, told Bloomberg if more shares in Vinamilk become “available and it makes financial sense, [they] will look at it.”

“That has always been our position,” he said.

Bloomberg said Sirivadhanabhakdi is Thailand’s richest man, while Forbes placed him in second place, behind the Chearavanont brothers, in Thailand’s Richest List released in February.

Source: Bloomberg

Photo: CBR Investment AG