Masan Group Corporation and a consortium led by Alibaba Group and Baring Private Equity Asia (BPEA) on Tuesday announced the signing of definitive agreements for the acquisition of a 5.5 percent stake in The CrownX for a total cash consideration of US$400 million.
The CrownX is Masan’s integrated consumer retail arm that consolidates its interests in Masan Consumer Holdings and VinCommerce.
The transaction implies a pre-money valuation of $6.9 billion for 100 percent of its equity, an equivalent of $93.5 per share.
Masan will own 80.2 percent of the company post the consortium’s investment.
The formation of The CrownX last year brought together two industry leaders to form a consumer and retail powerhouse.
As part of Alibaba’s investment, The CrownX will now partner with Lazada to build the former’s digital presence and capabilities and accelerate the offline to online market in Vietnam.
This deal marks a shared vision across the company’s shareholders that The CrownX has the potential to establish Vietnam’s first tech-enabled consumer ecosystem and expand its reach to serve consumers nationwide.
“This strategic partnership will accelerate our ability to achieve our goal of transforming The CrownX into a one-stop shop to serve consumers’ everyday needs, whether offline or online," said Danny Le, CEO of Masan Group.
"Our immediate priority is to modernize Vietnam’s grocery market and develop an unparalleled consumer proposition from assortment to shopping experience.
“I strongly believe that this partnership will reduce our learning curve and enable us to reach our endgame more efficiently and effectively."
“We are delighted to be partnering with Masan and Alibaba, and believe this strategic investment has the potential to supercharge The CrownX’s growth in a nascent retail market and create the largest consumer ecosystem in Vietnam," said Janice Leow, managing director of BPEA.
"As a long-term investor in the country, we think Vietnam has a long runway for growth supported by strong macroeconomic tailwinds and attractive demographics.
“The CrownX also has tremendous digital potential, particularly in e-commerce and data analytics.
"BPEA prioritizes digital transformation in all of our portfolio companies, and we look forward to working with the company in its next stage of growth.”
As a part of the transaction, VinCommerce will enter a strategic cooperation agreement with Lazada, Alibaba’s Southeast Asia e-commerce platform.
VinCommerce will be the preferred grocery retailer of choice on Lazada’s e-commerce platform in Vietnam.
The parties will co-share know-how, co-develop analytics to spur grocery as a key online category, transform VinCommerce’s offline stores into pick-up points for online orders, and explore synergies between the respective parties’ logistics platforms for service and cost optimization for consumers.
Grocery accounts for 50 percent of Vietnam’s retail market and 25 percent of consumer wallet share and is of essential daily use, but online penetration is still nascent.
Masan has aspirations for The CrownX’s online gross merchandise value to account for at least five percent of its total sales value in the upcoming years.
Credit Suisse (Singapore) Limited acted as the exclusive financial advisor to Masan Group.
Deutsche Bank acted as the exclusive financial advisor to BPEA.
The transaction closing is subject to customary corporate approvals.
Masan is also in advanced discussions regarding a further strategic investment of $300-400 million into The CrownX from other investors, expected to close in 2021.
Masan Group’s member companies and associates are industry leaders in branded food and beverages, branded meat, value-added chemical processing, and financial services, altogether representing segments of Vietnam’s economy that are experiencing the most transformational growth.
The CrownX was established with the vision to become a 'Point of Life' platform in order to provide more products and services to Vietnamese consumers online and offline.
Alibaba Group aims to build the future infrastructure of commerce while Baring Private Equity Asia is one of the largest private alternative investment firms in Asia, with assets under management of $23 billion.