Thai firms eye stake in Vietnam’s largest brewer: WSJ

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A Sabeco booth at the Berlin Beer Festival in Germany in August, 2014. Photo credit: Vietnam Plus A Sabeco booth at the Berlin Beer Festival in Germany in August, 2014. Photo credit: Vietnam Plus

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Thailand’s top two brewers are independently seeking a stake in Vietnam's Sabeco as sales decline at home, the Wall Street Journal reported Tuesday.
Thai Beverage Pcl, the maker of Chang Beer, is looking to buy roughly 40 percent of Sabeco in a deal that could cost nearly US$1 billion, the newspaper reported, citing an unidentified official inside Vietnam's Ministry of Trade.
ThaiBev has offered to pay as much as VND80,000($3.76) per share for the company, which is fully known as Saigon Beer Alcohol Beverage Corp, which translates to a 60-percent bump in the company’s over-the-counter share price of VND45,000 to VND50,000.
At that price Sabeco, would be valued at roughly $2.4 billion.
The government of Vietnam currently owns 89 percent of Sabeco.
The anonymous official told the Journal that Singha Corp., which makes Singha Beer, also expressed interest in the government’s Sabeco stake, but didn't provide any further details.
ThaiBev and Singha declined to comment, according to the newspaper.
The official said that ThaiBev executives have already met with Vietnam Minister of Industry and Trade Vu Huy Hoang to express interest in Sabeco. The minister, the official said, advised ThaiBev to speak to Sabeco Chairman Phan Dang Tuat, adding that a decision to begin sale talks will depend on Prime Minister Nguyen Tan Dung.
Mr. Tuat, the official said, hasn’t agreed to meet ThaiBev yet.
Mr. Tuat, meanwhile, told the Journal that any plans to sell the government’s stake in Sabeco would be up to the state, but added that if it bought 40 percent of Sabeco, ThaiBev would have exceeded the existing foreign-investor limits of 25 percent in state assets.
Sabeco, which owns popular brands like 333 and Saigon Beer, caters to 46 percent of Vietnam’s beer market, according to market research firm Euromonitor.
Sabeco posted an after-tax profit of VND2.73 trillion ($128 million) for the first nine months of last year, a 23-percent year-on-year increase.
Euromonitor data shows that beer volume in Thailand was estimated at 1.93 billion liters last year, down from 1.97 billion liters in 2013.
In Vietnam, beer consumption volume increased eight percent last year to 3.2 billion liters, according to the trade ministry. Euromonitor expects beer volumes in Vietnam to grow nine percent in 2015 to 3.88 billion liters, while it expects Thai volumes to drop to 1.89 billion liters this year.

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