The Jerusalem Post

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

- • By MAI NGUYEN and ANSHUMAN DAGA

HO CHI MINH CITY/SINGAPORE (Reuters) – Vietnam is set to auction up to a $5 billion stake in top brewer Sabeco on Monday, with Thai Beverage 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 $14.10 a share, for Saigon Beer Alcohol Beverage Corp. (Sabeco), whose shares have nearly trebled to 309,200 dong since its listing a year ago.

Thai Beverage, through a partly owned Vietnam unit, is the only company that has expressed interest in owning more than 25% of the company, which has roughly 40% 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%. With 10% already in foreign hands, that leaves only 39% on the table for overseas buyers at Monday’s auction. Local bidders can bid for a majority stake of up to 54%. Heineken holds a 5% 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 authorized 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, they said.

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

Reuters previously reported that the auction was drawing the interest of brewing groups such as Anheuser-Busch InBev, Kirin Holdings, Asahi Group Holdings and San Miguel. But there is no clear sign of whether they have participat­ed in the auction.

The government’s minimum price for the 54% stake on offer valued Sabeco at about 36 times core earnings, more than double the trading multiples of around 15 for some global peers, according to Reuters data.

Vietnam’s Trade Ministry is expected to announce the bidding result on Monday afternoon.

 ?? (Kham/Reuters) ?? CANS OF Sabeco beer are displayed for sale in a market in Hanoi earlier this year. Thai Beverage, through a partly owned Vietnam unit, is the only company that has expressed interest in owning more than 25% of the company, which has roughly 40% of the...
(Kham/Reuters) CANS OF Sabeco beer are displayed for sale in a market in Hanoi earlier this year. Thai Beverage, through a partly owned Vietnam unit, is the only company that has expressed interest in owning more than 25% of the company, which has roughly 40% of the...

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