At the Vietnam Mergers and Acquisitions Forum 2023 on November 28, the Masan Group deal to buy the VinCommerce and VinEco chains topped the list of 10 outstanding deals of Vietnamese enterprises buying Vietnamese enterprises in the 2009-2023 period.
Masan Group representative (middle) received the award at the event on November 28. Photo: Masan Group
First steps into the beverage industry
Masan's first step on the M&A path was to penetrate the beverage market through the purchase of a controlling 50.3% stake in Vinacafe in 2011. The ratio was then increased to 53.2% in 2012. The total investment value of this deal was 58 million USD.
To further penetrate the beverage industry, in 2013, Masan bought 24.9% of Vinh Hao Mineral Water shares, then bought more shares and increased its ownership ratio to 63.5%. From 2014-2015, the company invested in Cholimex Food, Quang Ninh Mineral Water and Saigon Nutrition Food Company.
Deal with VinGroup , Phuc Long
In 2019, Masan Group merged the VinCommerce retail system (now WinCommerce) from VinGroup and officially owned the VinMart, VinMart+ chains (now WinMart, WinMart+). By 2020, Masan Tungsten (a subsidiary of Masan High-Tech Materials) acquired the tungsten business platform of HC Starck Group GmbH.
In 2021, Masan spent 15 million USD (equivalent to 340 billion VND) to hold 20% of the shares, with an initial valuation of 75 million USD. Just one year later, Phuc Long's valuation increased 6 times to nearly 450 million USD, after Masan spent more than 6,100 billion VND to buy an additional 65% of the shares. Currently, the group owns 85% of the shares of this coffee chain. In 2022, the company continued to buy 15% of the shares of Nyobolt Limited.
Customers experience Phuc Long products. Photo: Masan Group
The above deals have made Masan Group Corporation a typical M&A strategy enterprise in the 2009-2023 period, at the Vietnam Mergers and Acquisitions Forum 2023 (M&A Vietnam Forum 2023).
Over the years, foreign retail corporations have spent a lot of money and now control a series of leading enterprises in Vietnam. This trend has not stopped when many domestic enterprises are facing difficulties and challenges.
Fresh vegetable counter at Winmart. Photo: Masan Group
Masan's representative said the most memorable mark was the merger of the VinCommerce retail system. Accordingly, the board of directors only took one month to make a decision. This person affirmed that Masan's cooperation with Vingroup had the reason of "wanting to keep the retail market for domestic management to maintain the Vietnamese brand".
By operating WinCommerce, Masan not only owns the capacity to produce branded consumer goods but also further expands its already excellent distribution system. Masan also becomes the first and only consumer-retail group in Vietnam with a model similar to a few of the world's leading consumer-multichannel retail groups such as Walmart.
"Transforming" the retail chain WinCommerce
4 years after the M&A deal, the number of WinCommerce points of sale has increased from 3,020 in December 2019 to more than 3,600 supermarkets, WinMart, WinMart+, WIN stores, serving about 32 million customers per month in 62 provinces and cities nationwide. As of November 30, the scale of the WIN chain of stores reached 385 points of sale nationwide.
With many efforts in innovating operations, improving product and service quality and implementing the "good price" strategy with a variety of products, from a business recording a loss of more than 100 million USD when it was first taken over by Masan, WinCommerce's business results have now had many positive changes.
Winmart attracts many customers to shop. Photo: Masan Group
According to the third quarter financial report, 70% of WinCommerce's mini-supermarket group recorded a net profit margin of 2.2%, the second consecutive quarter with positive net profit. WinCommerce achieved stable EBITDA (earnings before interest, taxes, depreciation and amortization) growth in the third quarter, reaching an EBITDA margin of 2.9%, up from 2.2% in the second quarter and 1% in the first quarter. With the momentum from growth strategies, WinCommerce achieved a break-even EBIT margin in the third quarter and is on track to reap profits in the near future, for the first time since the Covid-19 period.
Masan's management expects WinCommerce to reach the break-even point in after-tax profit of the entire network in 2024 thanks to effective growth strategies.
Thai Anh
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