Unit selling of 16.3% stake in VinCommerce to SK Group revealed

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SK Group spent $ 410 million to acquire 16.3% stake in VinCommerce and became a major foreign shareholder in this retail system.

Mr. Danny Le, CEO of Masan Group. (Photo: MSN).

Speaking via email with Forbes, a spokesperson for SK Group said the company paid $ 410 million for its 16.3% stake in VinCommerce. Number of shares bought back from Masan Group JSC (Masan Group, code: MSN), controlling unit in VinCommerce and also a strategic partner of SK Group. Since 2018, SK Group has held a 9.5% stake in Masan Group.

Masan side has not released official information on this matter, but according to the writer’s research, 16.3% of VinCommerce shares acquired by SK Group coincide with the previous holding rate of GIC (investment fund belonging to Government of Singapore).

Thus, it is very likely that GIC has divested at VinCommerce, Masan Group finds a buyer to buy back the above shares and that person is none other than SK Group, a partner who has been in a relationship for more than 3 years with vietnam’s consumer goods manufacturing group.

Masan said in a statement issued on April 6 that the group plans to use part of this investment, approximately US$225 million, to strengthen its balance and increase capital for future growth initiatives.

SK Group is the third largest corporation in Korea. The move to invest in VinCommerce, assessed by Forbes, will help this Korean group gain more access to the rapidly growing Southeast Asian market.

The representative of SK Group also affirmed: “We have actively invested in Vietnam over the past few years because of the high growth potential of the market. SK Group finds strong opportunities in Southeast Asia as economies continue to scale.”

“Expect VinCommerce will develop like Alibaba and Amazon in the future”

In 2020, the Vietnamese economy grew 2.9% despite the recession caused by the COVID-19 pandemic. The International Monetary Fund expects Vietnam’s growth to reach 6.5% in 2021 based on “strong economic foundations”.

The retail market alone has seen a boom in the past decade, when the manufacturing and export sector created jobs and increased the middle class of the population living in 96.5 million people.

Representative of SK Group said that VinCommerce is a unique opportunity, with the potential to hold more than half of the retail market in Vietnam. The system currently operates 2,300 convenience stores and supermarkets across the country. And that’s just an offline retail channel.

“SK Group invests in VinCommerce because it is attractive to the growth plan of this system, with the goal of becoming a multi-channel retailer, serving customers from online to offline. We expect VinCommerce to grow just like Alibaba and Amazon in the future,” said a SK Group spokesperson.

About SK Group, in 2018, this group established an SK Investment fund in Southeast Asia to seek investment opportunities in the region with a total population of 655 million people. Currently, the group owns 6.1% shares of Vingroup – JSC (code: VIC), the largest private corporation in Vietnam.

Subsidiary SK Energy holds a 5.53% stake in PetroVietnam Oil. Last year, SK Group also acquired a 24.9% stake in Vietnam-based Imexpharm Pharmaceutical Company.

SK Group is a family-controlled chaebol group second only to Samsung and Hyundai in terms of revenue. Its subsidiaries operate mainly in the energy, chemicals, semiconductors, telecommunications and biotechnology sectors.

Tim Hwang, CEO of Washington-based FiscalNote Data and Communications Company, said South Korean chaebols are finding their way into Southeast Asia because their domestic market is too tight.

For example, in 2019, Samsung chose Vietnam as its third Samsung Showcase, which is a shop displaying the latest devices from the world’s leading electronics company. Korean companies are also encouraged to invest in Southeast Asia under the “New Southern Policy” (NV) of South Korean President Moon Jae-in.

Plans for South Korea to deepen ties with Southeast Asian nations and reduce their dependence on China and the US. As of 2019, Korea is the country with the 5th largest amount of FDI in Vietnam.

Mr. Rajiv Biswas, Chief Economist for Asia Pacific at IHS Markit said: “The Korean economy is facing a long-term slowdown in consumer spending growth due to population aging. This new investment in Vietnam gives SK Group a strategic position in one of the fastest growing emerging markets in the world. ”

Source: vietnambiz.vn – Translated by fintel.vn