The Ministry of Industry and Trade (MOIT) has announced it will submit the plan to divest from its Sabeco holdings to Deputy Prime Minister Vuong Dinh Hue before October 20th (next Friday).
Early indications are that MOIT will sell a 53.59% stake in Sabeco, Vietnam’s largest brewer. Currently, the ministry owns 89.6% of charter capital, and the remaining 36% would allow the State to retain veto rights at shareholders’ meetings.
It has not clearly stated whether Sabeco shares will be sold all at once or not. However, it is thought that Sabeco’s plan will resemble the case of SCIC selling Vinamilk shares in several phases.
The market value of 53.59% stake in Sabeco is about US$4.2 billion. Such a large-scale deal has never taken place in Vietnam's financial market.
Sabeco's charter capital was confirmed at more than VND6,400 billion (roughly US$282.1 million) when equitized in 2008 and has remained unchanged since then. In the 10% of shares sold via equitization, Heineken holds 5%.
Since Sabeco's divestment announcement earlier this year, Sabeco's shares price have risen sharply. By Oct 12th, the price was VND266,000 (about US$11.73), increasing by 35% since the beginning of the year. The market value of Sabeco is now US$7.7 billion.
At the end of September, Akiyoshi Koji, President and Chief Operating Officer at Asahi Group Holdings, Ltd, suggested in an interview with Bloomberg that Sabeco shares were too expensive. Sabeco's P/E ratio (Price-Earnings) is 35, compared to 16 of Asahi, 21 of Carlsberg, and 20 of Heineken. Asahi was once interested in buying Sabeco shares.
According to Bloomberg Intelligence, Sabeco currently holds 40% of the beer market share in Vietnam with two leading brands: 333 and Saigon. Last year, while the world’s beer production dropped for the third year in a row, Vietnam's market grew by 11.2% over 2015. Sabeco set a target of earning over VND34 trillion (roughly US$1.5 billion) this year.