Singapore company seeks to increase 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.