Vietnam to name buyer of up to US$5 billion stake in top brewer Sabeco

HO CHI MINH CITY/ SINGAPORE: Vietnam is set to auction an up to US$ 5 billion stake in top brewer Saigon Beer Alcohol Beverage Corp (Sabeco) today ( December 18), with Thai Beverage ( Thai Bev) the only potential bidder to have expressed interest in a majority stake.

The keenly anticipated sale of the state- owned maker of Bia Saigon gained momentum in recent months after being hampered for years by political resistance, fickle policy- making and complications over valuations.

The government has set a minimum sale price of 320,000 dong or US$ 14.10 a share for Sabeco, whose shares have nearly trebled to 309,200 dong since its listing a year ago.

Thai Bev, through a partlyowned Vietnam unit, is the only company which has expressed interest in owning more than 25 per cent of the company, which has roughly 40 per cent of the beer- loving Vietnamese market.

So far, no formal bid had been made.

Vietnam’s young population and booming economy should make Sabeco an attractive asset for global brewers hoping to expand in Southeast Asia, but a high minimum bid price and foreign ownership limits appear to have turned off potential buyers.

Sabeco’s foreign ownership is capped at 49 per cent. With 10 per cent already in foreign hands, that leaves only 39 per cent on the table for overseas buyers at Monday’s auction. Local bidders can bid for a majority stake of up to 54 per cent. Heinken holds a five per cent stake.

“There’s a disconnect between what the government wants to achieve and how international brewers view this auction,” said one person familiar with the matter.

“In a normal auction, bidders are fully aware of what stake they’ll end up owning and bid for it accordingly,” said the person, who was not authorised to speak to the media.

Unlike similar sales in developed markets, where investors are whittled down over several rounds and offers can be adjusted, Sabeco bidders need to submit a single offer for a specific number of shares in a sealed envelope in one round.

Thai Bev, controlled by tycoon Charoen Sirivadhanabhakdi, was keen to acquire Sabeco as part of a strategy to expand outside its home market, sources told Reuters. The company had already lined up bank guarantees to support the bid by its Vietnam unit, sources said.

There was no immediate response from Thai Bev to a query from Reuters. — Reuters