Masan Consumer, the consumer goods arm of Masan Group, has announced its subsidiary Masan Food has bought a 32.84 per cent stake in Cholimex Foods, a unit of Cho Lon Investment & Import Export Co Ltd.
The group has also announced it’s plans to takeover Saigon Nutri Food, which specialises in sausages and canned food, through Masan Food.
Masan Food has planned to buy 3.97 million shares of Cholimex Food, which accounts for 49 per cent in the target company, at VND90,000 ($4.2) per share. However, Masan Food could buy acquire 2.66 million shares, or 32.84 per cent.
After the purchase, Cholimex Foods has become Masan Food’s affiliate.
This failure to acquire a higher stake was predictable, as earlier the two major stakeholders of Cholimex Foods – Cho Lon (40.72 per cent) and Nichirei Foods (19 per cent) had jointly made a statement refusing to sell shares to Masan Food, at any price.
The probable sellers in this deal could be VietCapital Real Estate, which was holding a 10 per cent stake, and other small shareholders.
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Currently, Cho Lon, Nichirei Foods and Masan Food collectively hold 92.6 per cent in Cholimex Foods.
Masan Consumer, which is significant player in the chili source market segment, wanted to acquire Cholimex Foods (also a leading player in the same market) to consolidate it’s position. meanwhile, the firm’s (Cholimex Foods) other shareholders maintained that they want to maintain fair competition.
Masan Food has a charter capital of VND1.24 trillion ($58.2 million), while Cholimex Food’s charter capital is VND81 billion ($3.8 million). Cholimex Foods’ net profit in 2012, 2013 and the first half of 2014 were respectively $1.9 million, $1.8 million and $0.9 million.
In September 2014, Cho Lon’s CEO Dao Xuan Duc is said to have fully withdrawn capital from four affiliates – Cholimex Garment, Viet So Investment, Green Mimoza Tourist and Cho Lon Seafood – to prepare for an initial public offering (IPO).
“Our company is one of the 432 to be equitised by 2015,” Duc said, adding that the state would hold less than 50 per cent after the expected IPO in the third quarter.