South Korea’s SK Group buys 16.3% stake in Vietnamese retailer VinCommerce for $410m

The South Korean conglomerate SK Group has acquired a 16.26% stake in the Vietnamese retail chain VinCommerce for a consideration of $410 million, according to an announcement. The transaction values the retailer at $2.5 billion.

VinCommerce is currently owned by Masan Group. In December 2019, the Vietnamese behemoth Vingroup had entered into a deal to merge VinCommerce and its agriculture unit VinEco with Masan. After the merger, Masan established The CrownX, which consolidates Masan’s interest in VinCommerce and its arm Masan Consumer Holdings.

Credit Suisse (Singapore) Limited acted as the exclusive financial advisor to Masan Group. Vingroup is said to complete the transaction to sell its remaining shares in The CrownX.

“Our investment in VinCommerce is part of SK’s broader strategy of investing in Vietnam’s fast-growing sectors,” said Woncheol Park, representative director of SK South East Asia Investment, the SK Group arm that made the investment.

Masan is planning to use its proceeds from this transaction (approximately $225 million) to strengthen its balance sheet and to fund growth initiatives.

SK’s investment validates Masan’s turnaround execution capabilities: store network and assortment optimisation, continuous profitability improvement through disciplined commercial margin enhancement, and operating cost-saving rationalisation, the group said in the announcement.

VinCommerce operates the largest grocery modern trade retail platform in Vietnam with supermarket chain VinMart and Minimart chain VinMart+. Masan also owns VinEco — the largest vegetable and fruit brand in Vietnam that is available exclusively at VinMart and VinMart+ stores.

VinCommerce achieved an EBITDA breakeven in the fourth quarter of 2020 and delivered positive EBITDA in the first quarter of 2021. The management now expects to achieve positive EBIT in the second half of this year.

The SK Group is one of the largest corporate groups in South Korea, with businesses across energy, chemicals, telecommunications, semiconductors, logistics, and service sectors. SK Group operates globally across over 40 countries and had a consolidated revenue of $86 billion as of year-end 2020.

In March, DealStreetAsia reported that the SK Group was said to be mulling an investment in Vietnam’s largest pharmacy retail chain Pharmacity. The funding value could be up to $90 million. DealStreetAsia could not ascertain if the round would be all-equity or include debt financing.

The SK Group had earlier put $1 billion in Vingroup and $470 million in the diversified company Masan Group.

In 2019, Korea’s National Pension Service (NPS) and SK Group had joined forces to form a 1 trillion won ($860 million) fund to invest in Vietnam, according to Korean media reports.

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.

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.