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Thai Beverage to buy 54% stake in Vietnam's Sabeco for $4.8bn

DBR Staff Writer Published 20 December 2017

Vietnam Beverage, ThaiBev’s domestic unit, has won a bidding to acquire 54% stake in Saigon Beer Alcohol & Beverage Corp (Sabeco) for $4.8bn.

Sabeco is owned and under the authority of Vietnam's Ministry of Trade and Industry. The company's brands include Saigon Beer and 333 Beer.

The company plans to introduce two new products next year and increase its market share in the country.  

Brewing giants such as AB InBev, Kirin, Heineken and San Miguel were also interested in the bidding process, but reportedly lost interest due to Sabeco’s high valuation.

Thai Beverage, owned by billionaire Charoen Sirivadhanabhakdi, produces Chang Beer.

Business Times quoted Thai Beverage as saying: "The acquisition will enable the group to expand in an important regional market for the group's products, increase the group's product offering, and provide the group with immediate access to an extensive local distribution network. Sabeco has strong financial performance with margin expansion potential."

Thai Beverage will acquire 343.6 million in Sabeco’s shares from the Ministry of Industry and Trade in Vietnam, at a price of 320,000 Vietnamese dong ($14.11) per share.

Sabeco’s financial information revealed that the book value of sale shares stood at 7.95 trillion dong ($350m) and the net tangible value of assets was 7.97 trillion dong ($351m).

With this acquisition, ThaiBev aims to attain a dominant position in East Asian beer market. The beer market in Vietnam was worth about $6.48bn last year.

ThaiBev recently acquired Myanmar Distillery Company, the maker of Grand Royal Whisky for $1bn.

Aging population and increasing excise taxes are acting as the limiting factors for Thai Beverage is forcing the company to increase its share in the overseas market instead of home market.


Image: Thai Beverage to acquire 54% stake in Sabeco. Photo: Courtesy of Theeradech Sanin/FreeDigitalPhotos.net.