Masan Group (MSN) has announced that Bain Capital, the world’s leading private investment fund, has agreed to invest at least $200 million in equity capital in MSN with the value of VND85,000 per share. The price is much higher than the market price of VND77,400 at which shares are traded on bourse.

The transaction is an equity investment under the form of preferred stocks with dividends convertible into common shares at a ratio of 1:1. In the first five years, the dividend is fixed at zero percent, while from the sixth year, the dividend can be up to 10 percent per annum. In addition, foreign investors will still receive the dividend to be paid for common shares, if any.

In the 10th year after the date of stock issuance, the capital must be converted into Masan Group’s common stocks.

The funds raised from Bain Capital are expected to be used to improve Masan's financial position and optimize the balance sheet.

Sources said some other investors are negotiating with Masan. It is expected that Masan may attract up to $500 million worth investment capital if considering its capital demand and market conditions.

Analysts said they can see strong foreign capital flow into Vietnam through direct and indirect investments, despite upheavals in the world’s economy and dollar fluctuations.

Retail, finance and pharmacy are the business fields that have caught the most attention from foreign investors.

Reuters on September 29 reported that GIC, the Singaporean national investment fund, and Thai investors wanted to buy 20 percent of shares of the third largest retail chain in Vietnam – Bach Hoa Xanh, with the value of $1.5-1.7 billion. The deal has nearly wrapped up, slated for the first quarter in 2024.

Drug retail seems to be the most attractive business field for South Korean investors. Business Korea reported that Dongwha Pharm has signed a contract on spending 391 billion won, or $30 million, or VND720 billion, to acquire 51 percent of Trung Son Pharma’s shares, a company which owns the largest drugstore chain in western Vietnam. The deal is expected to be completed in October.

Trung Son Pharma now owns 140 drugstore chains which brought revenue of VND1.3 trillion in 2022. The retail chain has very high growth rates, 46 percent per annum since 2019, which is equal to FPT’s Long Chau chain, and much higher than the An Khang chain.

In mid-July, according to Bloomberg, Thomson Medical Group agreed to buy back the controlling stake in FV International Hospital with $381.4 million in shares. This is the biggest ever deal in the healthcare sector in Vietnam.

In the finance and banking sector, according to Reuters, SHB is negotiating the sale of 20 percent of its shares with the value of $2.2 billion to investors from South Korea and Japan.

Time to buy

Over many years, Japanese, Thai and South Korean corporations have been buying into Vietnam’s enterprises that lead in their fields, including retail, consumer goods, finance and banking, pharmacy, food and beverage, and plastics.

The biggest deals in recent years included the Thai billionaire’s takeover of Sabeco, the largest brewer in Vietnam, and the acquisition of a large amount of Vinamilk shares.

Corporations from Singapore, the US and EU have also come to Vietnam to seek opportunities recently.

Bain Capital is a US-based private investment fund headquartered in Boston. The deal is its first project in Vietnam.

Bain Capital’s Barnaby Lyons said Masan is its strategic project in Vietnam, the fastest-growing consumer market in Southeast Asia with a growth rate of 7.7 percent in 2022-2040.

Warburg, another US-based investment fund, is well known in Vietnam. It specializes in investment deals worth hundreds of millions of dollars and its total investment capital in Vietnam has totaled billions of dollars. Novaland (real estate developer), Vincom Retail and VinaCapital are some of its projects.

Analysts say that most of the recent share transfer transactions were made with leading Vietnam companies in every business field, targeting the domestic consumer market with 100 million people. In addition, foreign investment has been poured into companies making products for export to Japan, the US and Europe.

Manh Ha