Vietnam’s FMCG giant Masan offers almost $28mn for 60% of local detergent firm
Wednesday, December 25, 2019, 15:51 GMT+7
A new business of local fast-moving consumer goods giant Masan has put nearly US$28 million on the table to purchase a major stake in a domestic detergent producer, a source told Tuoi Tre (Youth) newspaper on Tuesday.
Masan HPC, which Masan Consumer Corporation has just established to specialize in home and personal care, offered to buy 60 percent of Net Detergent Joint Stock Company (Netco) at VND48,000 (US$2.07) per share, valuing the entire company at $46 million, the source said.
That means the bid price was $27.6 million, for a price-earnings multiple of 19x.
This offer is in line with Masan’s five-year development strategy to expand its portfolios, including home and personal care which is one of the largest and most lucrative industries in Vietnam, with a market size of up to $3.1 billion, said Truong Cong Thang, chairman and CEO of Masan Consumer Corporation.
“Netco is a starting point for Masan in order to build a platform to diversify home and personal care products,” Thang elaborated.
This deal is subject to approval by relevant agencies and Netco’s regulations but it is expected to be finalized within two months from the offer, he added.
Founded in 1968, Netco is one of the leading local businesses in the home and personal care industry in Vietnam.
The company raked in VND1.117 trillion ($48.3 million) in revenue in 2018, earning VND57 billion ($2.5 million) in post-tax net profit, with two popular brands Net and Netsoft.
Netco holds 1.5 percent of the detergent market in Vietnam, very small compared to 54.9 percent of Unilever, 16 percent of P&G, 11.6 percent of Dai Viet Huong, 2.7 percent of LIX, and 2.4 percent of Vico, market research firm Euromonitor said in its ‘Laundry care market in Vietnam’ report.
On December 3, Vietnamese conglomerate Vingroup announced the transfer of its VinMart+ convenience stores, VinMart supermarkets, and VinEco farms to Masan.
A retail group of a “leading scale” and “outstanding competitiveness” would be formed after this transfer, with Masan in control and Vingroup being a shareholder, the two corporations said.
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