S Korea’s SK Group invests $470m in Vietnam-listed Masan Group

Fish sauce production at Masan Consumer. Visual from Masan Group report.

South Korea’s SK Group is investing $470 million in Vietnamese listed conglomerate Masan Group in a deal that will make it the largest shareholder in the company.

According to a Masan Group announcement on Wednesday, following the deal, SK will own 9.5 per cent in the Vietnamese entity. Masan plans to use the proceeds to fund its future growth initiatives, as well as to strengthen its balance sheet.

Masan will add up to $50 million of net earnings per annum next year, while gross debt to EBITDA is expected to decrease to 2.5x by this year-end. It also expects the core net profit to increase by at least 50 per cent this year and forecasts similar base case earnings growth momentum for the next fiscal year.

After this investment, the company will not issue additional shares to investors in three years.

Masan plans to consolidate cash by up-streaming free cash flows from its subsidiaries to build a strategic investment war chest and return capital to shareholders.

“The agreements will enable both parties to draw on each other’s strengths to accelerate Masan’s and SK’s respective growth strategies. The corporate groups aim to jointly pursue transformational business opportunities in Vietnam and to synergize existing business units,” Masan said in a statement.

It added that the partnership is expected to help the business deliver a high double digit growth in the coming years.

SK is one of the largest South Korean chaebols, with businesses across energy, chemicals, telecommunications, semiconductors, logistics and service sectors. Masan is also engaged in businesses such as mining, consumer goods, food and finance, which have been built up through M&A activity.

Masan said it will continue to seek M&A opportunities for long-term growth.

Woncheol Park, representative director, SK South East Asia Investment, commented: “Vietnam is an important foundation for our South East Asia strategy.”

Behind this $470 million investment is the aim to growing Masan’s consumer wallet share by five times to $100 per consumer per annum, Park said, indicating that the Korean major would probably inject more capital into the Vietnamese partner in the future.

Existing investors in Masan include Singapore sovereign fund GIC which is currently the second largest shareholder with a 5 per cent ownership, global alternative investment firm KKR, PENM Partners and the International Finance Corporation.

On a group level, KKR has invested the most significant amount of more than $600 million in the parent group Masan and its subsidiaries.

Also read:

KKR completes $250m investment in Vietnamese food major Masan

PE firm KKR makes full exit from Vietnam’s Masan Consumer

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.