Singapore company seeks to increase stake in Vietnam’s largest dairy firm
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A Singaporean shareholder in Vinamilk is seeking to increase its stake in Vietnam’s largest dairy firm. Jardine Cycle & Carriage Ltd has registered to buy 17.41 million shares between January 9 and February 7 through its wholly-owned local subsidiary, Platinum Victory, which will enable it to increase its ownership in Vinamilk from over 10 percent to 11.62 percent.
At a proposed price of VND125,000 ($5.38) per share, the transaction will be worth VND2.17 trillion ($94.42 million).
Last year Jardine, Vinamilk’s third largest shareholder, had registered on six different occasions to buy 14-17 million shares to increase its stake to above 11 percent, but was unsuccessful due to unfavorable market conditions.
It first bought a 3.3 percent stake in Vinamilk in November 2017. Within a month it raised its ownership to over 10 percent.
In April last year a representative of Jardine’s parent company, Jardine Matheson, became a Vinamilk board member.
Hong Kong-based Jardine Matheson is one of Asia’s biggest conglomerates with interests in luxury hotels, motor vehicles, property, food retail, transport financial services, and agribusiness and revenues of almost $16 billion in 2017.
F&N Dairy Investments, a subsidiary of Singapore-based Fraser & Neave Ltd, which is backed by Thai tycoon Charoen Sirivadhanabhakdi, owns a 17.31 percent stake in Vinamilk.
Vietnam’s dairy industry reported revenues of more than VND100 trillion ($4.4 billion) in 2017, with Vinamilk commanding more than a 50 percent market share.
According to a report by the EU-Vietnam Business Network, the market is expected to double in size by 2020 as the country’s population, personal incomes and dairy consumption increase.
Questions & Answers
Q.What is the primary objective of Jardine Cycle & Carriage Ltd's latest share purchase in Vinamilk?
What is the primary objective of Jardine Cycle & Carriage Ltd's latest share purchase in Vinamilk?
Jardine Cycle & Carriage Ltd is seeking to increase its ownership in Vinamilk from over 10 percent to 11.62 percent through the purchase of 17.41 million shares. This transaction will be conducted via its local subsidiary, Platinum Victory.
Q.Why were previous attempts by Jardine to increase its stake in Vinamilk unsuccessful?
Why were previous attempts by Jardine to increase its stake in Vinamilk unsuccessful?
Last year, Jardine made six attempts to buy shares to raise its stake above 11 percent, but these efforts were unsuccessful. This was attributed to unfavourable market conditions at the time of their registrations.
Q.What is the projected growth for Vietnam's dairy market?
What is the projected growth for Vietnam's dairy market?
According to a report, the market is expected to double in size by 2020. This growth is driven by increases in the country's population, personal incomes, and dairy consumption.
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