Mergers and acquisitions (M&A) activities in the processed food industry have been bustling in recent times and are expected to continue to grow because businesses in the industry still have a lot of potential for development.
Mergers and acquisitions (M&A) activities in the processed food industry have been bustling in recent times and are expected to continue to grow because businesses in the industry still have a lot of potential for development.
Many attractive deals
Recently, Nutifood Nutrition Food Joint Stock Company (Nutifood) announced the completion of investment procedures to hold 51% of shares of Kido Frozen Food Joint Stock Company (Kido Foods, stock code KDF). With this ownership ratio, Nutifood will become the parent company, taking control of Kido Foods - the owner of two familiar ice cream brands, Celano and Merino.
Investing in Kido Foods allows Nutifood to expand its healthy nutrition sector. At the same time, this deal also allows Nutifood to own a frozen food distribution system with hundreds of thousands of ice cream cabinets, covering a wide range of traditional and modern retail outlets, restaurants, hotels, and entertainment venues across the country.
Meanwhile, KIDO Group is famous in the market for M&A deals. Previously, this group reached an agreement to acquire the Tho Phat dumpling brand. By the end of the third quarter of 2023, Tho Phat was recognized as a subsidiary of KIDO, with a 51% ownership ratio, equivalent to an investment value of VND 810 billion.
In early October 2023, KIDO continued to pour in an additional VND 269 billion, increasing its ownership ratio at Tho Phat to 68% of shares, meaning this unit spent VND 1,079 billion to acquire Tho Phat dumplings.
By the end of 2023, there were several acquisitions or 100% acquisitions of Vietnamese food distribution companies by Japanese enterprises. This is a sign of the strong entry of foreign enterprises, especially Japanese enterprises, into the Vietnamese food distribution market.
Specifically, Dai Tan Viet Joint Stock Company (New Viet Dairy) - the largest commercial food wholesaler in Vietnam with 40% market share, has completed the transfer of all shares to Sojitz Group and its affiliated units. Information about the sale price was not disclosed.
Sojitz is also cooperating with Vinamilk and Vilico to invest in facilities for raising, processing and distributing beef products in Vietnam, supplying the national market and exporting. The scale of cooperation in each phase is expected to be up to 500 million USD, equivalent to 11,500 billion VND.
In addition, Japan's Marubeni Trading Co. acquired a significant minority stake in AIG Asia Components, a leading food ingredients supplier in Vietnam.
Vietnamese enterprises in the sights of foreign investors
In 2024, the agriculture, forestry and fishery sector achieved many successes in the international market and is expected to continue to break through in 2025. Therefore, many big players and foreign private investment funds increased their exposure through M&A activities, pouring large amounts of capital into Vietnamese enterprises.
Recently, GC Food Joint Stock Company (stock code GCF) announced its consolidated financial report for the third quarter of 2024, with revenue of nearly 172 billion VND, an increase of 31% over the same period last year; profit after tax reached nearly 23 billion VND, a sudden increase of 84%.
In the first three quarters of the year, GCF had a revenue of nearly VND440 billion, while in the same period last year it was VND376 billion; after-tax profit reached nearly VND55 billion, far exceeding the VND23 billion in the same period.
Mr. Nguyen Van Thu, Chairman of the Board of Directors of GC Food, informed that the fruit and vegetable processing and export industry is booming, so businesses in the industry are benefiting. Since 2023, the company has continuously received many requests for meetings and discussions from investment funds and foreign strategic partners. Most of the requests come from Singapore with the goal of jointly managing the business, participating in product development, expanding the market, etc.
“It is expected that in 2025, if the company moves its listing from the UpCom stock exchange to the Ho Chi Minh City Stock Exchange (HoSE), we will likely increase capital and invite new investors to increase cash, help the company develop better and invest in more factories. However, we want to maintain the initiative in general management and operation, both sides need to respect the long-term strategy set out in 5-10 years,” said Mr. Thu.
Vietnam is considered by many foreign investors to be a market with great potential, especially in the agricultural processing industry. Meanwhile, agricultural processing and food processing activities that meet standards still account for a relatively low proportion in the market's consumption structure. Ms. Nguyen Kim Thanh, General Director of Sa Ky Food Joint Stock Company, said that currently, Japanese enterprises are very interested in the food processing industry and the consumption market of Vietnam, because of the high proportion of young population and large consumer demand.
“There are some Japanese, Korean, and American investors who have learned about Sa Ky Company and expressed their desire to invest with the hope of receiving more than 51% of the shares. However, we prioritize cooperation invitations and consider the suitability with the investors to proceed to specific negotiations,” Ms. Thanh shared.
It can be seen that many foreign investors want M&A to open up cooperation opportunities in enterprises and industrial zones, create jobs for many workers, transfer technology, and diversify and make products more convenient. However, the acquisition of foreign enterprises also poses many challenges for Vietnamese enterprises and brands. Domestic enterprises need to proactively innovate, improve capacity, diversify products, and increase quality to survive and develop in an increasingly competitive environment.
Source: https://baodautu.vn/nha-dau-tu-ngoai-quan-tam-nganh-thuc-pham-che-bien-d231190.html
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