Transaction values VinCommerce at $2.5 billion for 100 per cent of its equity.
South Korea’s conglomerate, SK Group, announced acquisition of a 16.26 per cent stake in VinCommerce, a retail affiliate of Masan Group, for a total cash consideration of $410 million.
Masan is planning to use the proceeds from this transaction, amount of approximately $225 million, to strengthen its balance sheet and to fund future growth initiatives.
SK said that its investment validates Masan’s turnaround execution capabilities through store network and assortment optimization, continuous profitability improvement through disciplined commercial margin enhancement, and operating cost-saving rationalization.
SK Group is one of the largest corporate groups in South Korea, with businesses across energy, chemicals, telecommunications, semiconductors, logistics and service sectors. SK Group operates globally across over 40 countries and had a consolidated revenue of $86 billion as of year-end 2020.
VinCommerce achieved EBITDA break-even in the last quarter last year and delivered positive EBITDA in the first three months of this year. It is expected to to achieve positive EBIT in the second half of 2021.
In 2021, VinCommerce has laid out a clear plan to strengthen its platform to deliver high-growth and sustainable profits.
It plans to make commercial margin improvement of 2.0 per cent via direct fresh sourcing and strategic supplier contracts, nationwide rollout of pilot store models by the second quarter of 2021, and to enhance supply chain model empowered by auto-replenishment engines shared at Masan’s recent annual shareholder meeting.
VinCommerce operates the largest nation-wide grocery modern trade retail platform in Vietnam with supermarket chain VinMart and minimart chain VinMart+. It also owns VinEco – the largest vegetable and fruit brand in Vietnam that is available exclusively at VinMart and VinMart+ stores.
Vietnam’s modern trade grocery retail market is expected to increase its share from 8 per cent to 50 per cent of the retail landscape, making Vietnam the fastest growing modern trade grocery retail market in the Asia Pacific region over the next decade.
