Vietnamese behemoth Vingroup has entered into an agreement to merge its retail and agriculture units with Masan Consumer Holding, a subsidiary of the Masan Group, to form the country’s largest consumer platform.

Said in a statement that the transaction will help it focus better on developing its industrial and technology businesses. Under the agreement, Vingroup’s retail unit VinCommerce and agriculture unit VinEco will be merged into Masan Group. Vingroup’s shares in the two units will be converted into shares of the new company formed after the merger. Masan Group will take control of the new entity while Vingroup will be a shareholder. The new company, which aims to be the country’s leading consumer and retail corporation, will own a network of more than 2,600 supermarkets, a chain of VinMart and VinMart + stores in 50 provinces and cities with millions of customers along with a system of 14 high-tech farms of VinEco. Since its inception, VinCommerce has continued to expand its presence by increasing the number of stores, as well as the acquisition of supermarkets and convenience stores. The company completed the acquisition of the entire Fivimart chain of 23 supermarkets from Nhat Nam Joint Stock Company. In April this year, VinMart also acquired a chain of 87 Shop & Go-branded convenient stores. Most recently, it acquired local supermarket chain Queenland Mart as a continuing step to expand its retail market share. In September, Singapore’s sovereign wealth fund GIC led a consortium to invest $500 million in Vingroup’s retail unit, VCM Services and Trading Development Joint Stock Company, that was recently established to oversee the operations of its supermarket and convenience store chains. Vingroup set up VCM to indirectly hold shares in VinCommerce. According to business registration documents, Vingroup owns 64.3 per cent of VCM, while another 14.57 per cent is owned by two individuals. Last year, GIC also purchased a stake in local conglomerate Masan Group. The state investment firm bought roughly half of KKR & Co’s 4.7 per cent stake in Masan, according to Bloomberg. It purchased the stock as part of an overnight placement by KKR, which offloaded its entire holding in a $209 million deal. Masan Consumer is one of Vietnam’s largest local diversified FMCG companies. It manufactures and distributes a range of food and beverage products, including soya sauce, fish sauce, chilli sauce, instant noodles, instant coffee, instant cereals, and bottled beverages. Besides GIC, South Korea’s SK Group last year also invested $470 million in Masan in a deal that made it the largest shareholder in the company with a 9.5 per cent stake. SK is also a shareholder of Vingroup with 6.1 per cent stake after a $1 billion investment in May.

Source: https://www.dealstreetasia.com