More foreign investors pour money in

Masan Group Corporation (MSN) of billionaire Nguyen Dang Quang has just announced that the world's leading private equity fund Bain Capital has agreed to invest at least 200 million USD in equity capital in Masan Group, with each share valued at 85,000 VND. This is a much higher price than the 77,400 VND/share currently traded on the stock exchange.

This transaction is an equity investment in the form of dividend preference shares that can be converted into common shares at a ratio of 1:1. In the first 5 years, the fixed dividend rate is 0%, from the 6th year, the dividend rate can be up to 10%/year. In addition, foreign investors will still receive dividends at a rate equal to the dividend per common share (if any). In the 10th year from the date of issuance, this capital will be required to be converted into common shares of Masan Group.

The funds from Bain Capital will be used to enhance Masan's financial position and optimize its balance sheet.

Several other investors are negotiating with Masan. Based on the group’s capital needs and market conditions, Masan could increase the investment attraction to up to 500 million USD.

Recently, foreign capital flows into Vietnam through indirect channels (buying shares of Vietnamese enterprises) and direct channels (FDI capital) have been very positive despite many fluctuations in the world economy and unpredictable fluctuations of the USD.

With indirect investment channels, the retail , financial and pharmaceutical sectors are of great interest to foreign investors.

On September 29, Reuters reported that Singaporean sovereign wealth fund GIC and several Thai investors want to buy a 20% stake in Vietnam's third largest retail chain - Bach Hoa Xanh - at a valuation of about 1.5-1.7 billion USD. The deal is nearing its final stages and is expected to close soon, possibly in the first quarter of 2024.

Large Vietnamese enterprises, especially in the consumer and retail sectors, are attracting foreign investors to buy shares.

In the pharmaceutical retail sector, many Korean giants are pouring money into this potential field. According to Business Korea, Dongwha Pharm Group of Korea has just signed a contract to spend more than 391 billion won (nearly 30 million USD, about 720 billion VND) to buy 51% of the shares of Trung Son Pharma, a company that operates the largest pharmacy chain in Western Vietnam. The deal is expected to be completed in October this year.

Trung Son Pharma currently owns 140 pharmacy chains, with revenue of more than 1,300 billion VND in 2022. This is a business with a very large growth rate, an average of 46%/year since 2019, equal to FPT's Long Chau chain and much higher than Mr. Nguyen Duc Tai's An Khang pharmacy chain.

In mid-July, according to Bloomberg, Thomson Medical Group agreed to acquire a controlling stake in FV International Hospital (French-Vietnamese International Hospital) for $381.4 million, marking the largest-ever deal in the healthcare sector in Vietnam.

In the banking and finance sector, according to Reuters, SHB is negotiating to sell 20% of its shares at a valuation of 2.2 billion USD to investors from Korea and Japan.

Seize the "golden moment"

In recent years, corporations from Japan, Thailand, and South Korea have stepped up their purchases of shares in leading Vietnamese enterprises, focusing on many areas such as retail, consumption, banking and finance, pharmaceuticals, food, beverages, plastics, etc.

The biggest deal is the Thai giant spending 5 billion USD to acquire the beer company with the largest market share in Vietnam, Sabeco, or to hold a large stake in Vinamilk...

Recently, Singaporean, American and European corporations have also stepped up their search for opportunities in large Vietnamese enterprises.

Bain Capital is an American private equity firm headquartered in Boston. This transaction marks the group’s first investment in Vietnam.

Previously, investors also witnessed an American fund that often invests in Vietnamese enterprises, Warburg. Warburg Pincus is known as a fund that specializes in making investment deals of several hundred million USD each time, with a total investment value of billions of USD in a series of leading enterprises in Vietnam such as: Novaland (NVL), Vincom Retail (VRE), VinaCapital.

It can be seen that most of the share purchase transactions are focused on leading enterprises and aim to exploit the consumer and retail market of 100 million people in Vietnam. Others are export enterprises with the advantage of selling to Japan, the US and Europe such as the seafood industry.

Like investments in Sabeco, Mobile World or some pharmaceutical companies, Bain Capital's transaction in Masan is seen as investors' confidence in the growth story of the consumer market in Vietnam, as well as the prospects of Masan's retail industry.

Mr. Danny Le, CEO of Masan Group, said that Masan aims to increase profits many times over in the “golden time” of the consumption story in Vietnam. The cooperation transaction with Bain Capital is a recognition of Masan’s efforts in recent times.

Mr. Barnaby Lyons, a leader of Bain Capital, said that the cooperation with Masan is a strategic investment project in Vietnam. Vietnam is an attractive and high-growth consumer market.

Vietnam is considered the fastest growing consumer market in Southeast Asia with an expected annual growth rate of 7.7% for the period 2022-2040.

Impressive growth rate thanks to the increasingly rapid urbanization process. The explosion of the consumer class with increasingly higher income, more diverse needs, beyond basic needs, towards lifestyle and financial experiences.

Vietnamnet.vn