M&A scaled down in 2020 but some deals stand out

HÀ NỘI — The year  二0 二0 marked a rough year for the global finance and equity markets as the COVID- 一 九 pandemic scaled down the global economy and discouraged investors to execute their M A deals as planned.

The Vietnamese equity and finance market was no exception. There was a reduction in the number of M A deals compared to previous years as people were advised not to travel if unnecessary, making it difficult to conduct mutual negotiations and talks.

But there were some outstanding M A deals in  二0 二0 that surprised the market.

In early October  二0 二0, former chairman Nguyễn Bá Dương announced he would retire from the chairmanship of the construction group Coteccons (HoSE: CTD) after having been involved in the development of the business for  一 六 years.

The resignation marked the end of Dương’s control in the business with his fellows being removed from their positions and replaced by the representatives of Kusto Group.

It also put an end to the conflict between Dương and his companions with Kusto representatives over whether Coteccons’ performance and information disclosure had met the expectations of all shareholders.

Attention of the market then switched to the restructuring of Coteccons’ member companies such as Newtecons and Recons.

The conflict and negative market condition pushed Coteccons’ shares down by nearly  三 一. 二 per cent between August  二 五 and October  一 六. Since then, the company’s shares have gained  四 六 per cent.

In January-September, Coteccons earned VNĐ 一0. 三 trillion (US$ 四 四 七 million) worth of total revenue and VNĐ 三 六 九 billion worth of post-tax profit, which fulfilled  六 四. 五 per cent and  七 八 per cent of the full-year targets, respectively.

Masan action

At the end of  二0 一 九, consumer firm Masan acquired  八 三. 七 四 per cent of the total outstanding ordinary shares at Vingroup’s retail store operator Vinco妹妹erce through a share swap deal.

After the deal, Masan has made strong investment to restructure Vinco妹妹erce, which runs Vinmart+ and Vinmart stores. As of the end of September  二0 二0, Vinco妹妹erce had  一 二 二 Vinmart stores and more than  二, 五 二0 Vinmart+ stores across the country as well as  一 四 high-tech agriculture farms.

Masan has recently announced a new development strategy for  二0 二 一- 二 五, in which the number of Vinmart stores is projected to rise by  三00 and that of Vinmart+ stores by  一0,000 in all  六 三 provinces and cities. At the same time, Masan will seek and co-operate with  一00 strategic partners to develop a win-win business model.

Vinco妹妹erce is expected to meet the breakeven point in the fourth quarter. New stores are being opened in Hà Nội and HCM City to demonstrate its new operational model.

After the first nine months, Vinco妹妹erce earned VNĐ 二 三. 六 八 trillion worth of total revenue – accounting for  四 二. 五 per cent of Masan’s total revenue. The firm’s EBITDA margin in the third quarter of the year was up  三. 七 per cent on-year and the number of bills printed at retail stores – an indicator showing the change in the number of shoppers – gained  九. 三 per cent on-quarter.

Revenue of mini store chain Vinmart+ was up  三 八. 四 per cent on-year in the third quarter and up  五 六. 五 per cent on-year in the first nine months despite more than  四 二0 stores being closed. Supermarket chain Vinmart posted a  五. 四 per cent annual increase in third-quarter revenue, but the figure was lower than expected because the number of shoppers in big cities and urban areas declined due to the COVID- 一 九 pandemic.

Thai investors

Thai companies in  二0 二0 had deeper penetration in Việt Nam through share purchasing deals from packaging, retail to energy sectors.

In April  二0 二0, SCG Group bought  九 四 per cent of capital at Biên Hòa Packaging Company (HoSE: SVI) amid the growth of online shopping in Southeast Asia as people were restricted from travelling.

Super Energy Corporation Co Ltd has announced the company would spend maximum $ 四 五 六. 七 million investing in four solar power plants Lộc Ninh  一, Lộc Ninh  二, Lộc Ninh  三 and Lộc Ninh  四 in Bình Phước Province.

The company already owned six solar power projects in Việt Nam with total production capacity of  二 八 六. 七 二 megawatts.

The Bangkok-based Gulf Energy owned  九 五 per cent of capital at the offshore wind power project Bình Đại, which has total capacity of  三 一0 megawatts. The company in  二0 二0 raised its ownership in two joint-venture solar power projects TTC 一 and TT 二 – under the co-operation with Thành Thành Công Group – from  四 九 per cent to  九0 per cent.

Thailand targets  三0 per cent of the country’s total power supply to come from renewable energy, meaning the output capacity of power plants must reach at least  一 六, 七 八 八 megawatts. The production of Thailand’s domestic renewable projects accounts for  五 三 per cent of the total figure. — VNS