MobiFone, Vietnam’s second largest telco, has revealed that its acquisition of Audio Visual Global (AVG), the operator of An Vien pay TV service, cost it almost VND8.9 trillion ($400 million).
Earlier this year, the state-owned firm had announced that it had acquired a controlling stake of 95 per cent in AVG, but had not revealed the deal value.
MobiFone in its quarterly financial statement for the second quarter of this year, dated 11 August 2016 (which was released this week) put the deal value at VND8.9 trillion, even as it added that it was the only investment it had made during the first half of the year. The transaction was completed on 2 January 2016, according to the statement.
This deal also accounted for some 40 per cent of MobiFone’s total asset value by the end of June, as per figures available in the company’s report.
The mobile network operator posted a modest year-on-year increase in revenue within the first half, which was an over 19 per cent rise to reach VND16.2 trillion, while after-tax profit was VND2.51 trillion ($112.1 million), down 21 per cent.
The company also said that it estimated to earn VND33.1 trillion ($1.48 billion) in revenue and VND4.16 trillion ($186.5 million) in after-tax profit for this year and planned to contribute VND4.6 trillion ($206.2 million) to the State budget.
Several months after the AVG acquisition, the local government decided to scrutinise the deal as the telecom major had not revealed deal details even as it began working on its listing. MobiFone’s upcoming IPO is among the most anticipated listings in the country.
By purchasing the subscription TV unit, in addition to deploying 4G data service, MobiFone said the efforts were aimed at increasing its valuation and making its upcoming IPO more attractive. The tentative offering, long delayed for several years, has spurred bidding interest from a spate of major telcos around the world, including Singtel, Telstra, Telenor, Comviq and Axiata.
The AVG deal is among the top five M&As in Vietnam in value terms this year. Other big ticket deals include Thai beer firm Singha’s $1.1 billion share purchase of Masan Group’s consumer units; Masan Group’s consolidation in Masan Consumer by investing nearly VND17.5 trillion to up stake in the subsidiary, in which global private equity firm KKR exited; and Siam City Cement acquiring 65 per cent of LafargeHolcim Vietnam for $580 million.