Carlsberg eager to buy Habeco stake

 

According to the latest movement, Cees’t Hart, chairman cum general director of Carlsberg, has arrived to Hanoi to look for specific plans to increase Carlsberg’s holding in Habeco.

 

In the framework of the visit, representatives of Carlsberg discussed with the Ministry of Industry and Trade (MoIT), Habeco, and relevant authorities about the state divestment progress.

 

According to the representative of Carlsberg, despite the parties making progress after numerous discussions, they have yet to reach the final compromise due to legal problems relating to Carlsberg’s priority purchasing rights at Habeco.

 

Earlier in the third quarter of last year, the representatives of Habeco and Carlsberg signed a strategic co-operation agreement and a purchase contract. According to the contract, when Habeco lists its shares on the stock exchange, Carlsberg can use its priority purchasing rights to buy Habeco’s stake.

 

The reference price of Habeco on UpCOM is valued at VND134,500 ($5.91) and its capitalisation is VND31.75 trillion ($1.39 billion) at the date of March 15, 2018. In case, the government will sell 51 per cent of the state-owned stake for investors, the government may acquire VND16 trillion or $700 million from the deal.

 

However, an expert told VIR that while the contract is legal, its contents do not suit existing regulations. Thus, if the two parties implement some of the clauses in the contract, they will violate regulations.

 

Due to legal changes since Carlsberg completed the purchase of a 17.3 per cent stake to become the strategic investor and hold the priority purchasing rights, the government asked MoIT, which owns 81.8 per cent in Habeco, to scrutinise Carlsberg’s priority purchasing rights.

 

Previously, in 2016, Carlsberg proposed the authorities to permit it to buy more of the state’s stakes in Habeco, according to the plan it built. Notably, Carlsberg proposed MoIT to sell 20 per cent of the state's stake via a competitive bidding.

 

Carlsberg would make a bid, and if it won, it would use the same price to purchase 61.70 per cent more of the state holding at a later date. However, Carlsberg’s plans have been blocked by regulations.

 

At present, Cees’t Hart stated that Habeco is a good asset and Carlsberg will offer a competitive price for a stake in the brewer.

 

Opportunity to change the face of the Vietnamese beer market

 

Along with Carlsberg, Heineken, and AB Inbev also expressed ambitions to acquire Habeco’s stake to increase their market share in Vietnam.

 

According to Phan Chi Dung, former head of the Light Industry Department under MoIT, acquiring Habeco’s stake will help these investors to increase their beer market share in Vietnam, which they could not do by buying into Sabeco (for example, the Competition Law does not permit Heineken that has 25 per cent of the market share to buy a stake in Sabeco because the purchase would make competition unfair for the remaining players).

 

At present, Sabeco is the largest brewer in Vietnam with a market share of 41-43 per cent, while the runners-up are Heineken with 25-27 per cent, Habeco with 16 per cent, and Carlsberg with 10 per cent, respectively.

 

AB InBev is the largest brewer on the world holding 500 beer brands and one-third of the global beer market. The firm earns $45 billion in annual revenue, 30 per cent of which is profit. M&A deals play an important role in AB InBev’s success as well as its global coverage.

 

Heineken expressed the ambition to increase its market share via the purchase of Habeco’s stake numerous times. In case it succeeds in acquiring a controlling stake in Habeco, its market share will soar legally.

 

By Thanh Huong