Thai drink makers crave part in Vietnam’s largest brewery: WSJ

Saigon Beer Alcohol Beverage Corporation, Vietnam’s largest brewery, appears attractive to two leading Thai drink makers, the Wall Street Journal reported on Wednesday.

>> An audio version of the story is available here

Thai Beverage and Singha Corp. are interested in buying a stake in the Ho Chi Minh City-based firm, also known as Sabeco, because they are “attracted by growing beer consumption in Vietnam,” whereas sales in Thailand have declined, the U.S. newspaper said, citing people with knowledge of the matter.

Thai Beverage, better known as ThaiBev, is willing to pay VND80,000 (US$3.76) per share for Sabeco, while the state-run company’s over-the-counter price is only VND45,000 a share, the Wall Street Journal quoted a senior government official in the Vietnamese Ministry of Trade and Industry as saying.

With the maker of Chang beer seeking to acquire about 40 percent of Sabeco, the deal could be as huge as $1 billion.

The same official also revealed to the newspaper that Singha Corp. wants to buy the government’s stake in Sabeco, but did not elaborate on the offer.

The government currently owns 89.5 percent of Sabeco, and has planned to reduce the stake to 65 percent, and finally, 40 percent by the end of this year, according to the Vietnam Securities Times.

ThaiBev and Singha declined to comment on the Wall Street Journal report.

The U.S. newspaper attributed Vietnam’s attractiveness to foreign investors to the growth prospects in its beer market.

Vietnamese people spent at least $3.1 billion drinking 3.14 billion liters of beer in 2014, excluding imported beer, the Vietnam Beverages Association said in a report released on January 24.

Both beer production and consumption increased in Vietnam last year, with the former going up by 8.1 percent against the previous year.

Sabeco occupied the biggest market share with 1.3 billion liters, followed by the Hanoi Beer Alcohol and Beverage Joint Stock Corporation, with 637 million liters.

In the meantime, beer volumes in Thailand were estimated at 1.93 billion liters last year, down from 1.97 billion liters in 2013, the Wall Street Journal said, citing Euromonitor data.

Euromonitor expects beer volumes in Vietnam to grow nine percent this year to 3.88 billion liters, while it expects Thai volumes to drop to 1.89 billion liters.

Sabeco accounted for 45.5 percent of Vietnam’s beer market share, according to 2013 data provided by newswire VTC News.

It reported a pre-tax profit of VND3.91 trillion ($182.22 million) last year, seven percent higher than its full-year target and up nine percent from 2013, according to ministry-run Cong Thuong (Industry and Trade) newspaper.

ThaiBev is owned by Thai tycoon Charoen Sirivadhanabhakdi, who had a net worth of $11.3 billion at the end of June, according to Forbes.

The Singha Beer brand was built by the Bhirombhakdi family, who opened Thailand’s first brewery in the 1930s, according to the Wall Street Journal.

Like us on Facebook or follow us on Twitter to get the latest news about Vietnam!