Singha to Take $1.1 Billion Stake in Vietnam's Masan Units

  • Singha to buy stakes in two Masan units with new capital
  • Masan shares rise most since March 2014 after deal announced

Singha Asia Holding Pte Ltd is investing $1.1 billion in Masan Group Corp’s consumer and brewery units to take advantage of Vietnam’s young and growing middle class, the companies said in a joint statement today.

Singha, a privately held unit of Thailand’s Boon Rawd Brewery, will acquire 25 percent of Masan Consumer and 33.3 percent of Masan Brewery in a transaction comprised entirely of new capital that is expected to close in January, according to the statement. Masan Group is Vietnam’s largest listed consumer company by market capitalization.

“Vietnam has become an exciting story with its strong economic growth and stable macro economy,” Adithep Vanabriksha, Bangkok-based chief investment officer at Aberdeen Asset Management Plc, said by phone. “Its large and young population has also made it attractive for foreign companies’ expansion.”

Vietnam is forecast to post the strongest economic growth this year of six major Southeast Asian markets, according to the Asian Development Bank. The government estimates an expansion of 6.7 percent next year, the fastest pace in nine years.

“Masan’s strong distribution platform, which reaches all corners of Vietnam, will allow Singha to access a fast-growing market of more than 90 million consumers and support the expansion of newer categories,” Palit Bhirombhakdi, Singha Asia chief executive officer, said in the statement. “Masan will be well received by Thailand’s 65 million consumers, where its key categories such as fish sauce and Vietnamese coffee are appreciated for their unique flavor and origin.”

Shares of Masan rose 6.4 percent, the most since March 2014, at the close of trading in Ho Chi Minh City after the announcement.

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