ThaiBev's counter slips after its unit clinches Vietnamese brewer for S$6.5b

SHARES of Thai Beverage Public Co slipped half a Singapore cent or 0.5 per cent to S$0.965 by 10.30am, half an hour into the lifting of its trading halt, following news that its associated company Vietnam Beverage has won its bid to buy a 53.6 per cent stake in state-owned Vietnamese brewer Saigon Beer Alcohol Beverage Joint Stock Corp (Sabeco) for about 109.97 trillion Vietnamese dong (S$6.5 billion).

Close to eight million shares changed hands. The price excludes transaction expenses.

Vietnam Beverage, in which ThaiBev has a 49 per cent stake, had submitted its bid to acquire 343.6 million Sabeco shares from the Ministry of Industry and Trade of the Socialist Republic of Vietnam at a price of 320,000 Vietnamese dong per share.

Vietnam Beverage will be financing the consideration through a mix of its existing equity capital and loans.

Based on Sabeco's unaudited consolidated financial information for the 12-month period to end-September 2017, the book value of the sale shares was about 7.95 trillion dong (S$471.9 million), and the net tangible asset value was 7.97 trillion dong.

Based on Sabeco's last trading price, the latest open market value of the sale shares was about 106.18 trillion dong.

Thai Beverage said: "The acquisition will enable the group to expand in an important regional market for the group's products, increase the group's product offering, and provide the group with immediate access to an extensive local distribution network. Sabeco has strong financial performance with margin expansion potential."

Sabeco carries brands such as Saigon Beer and 333 Beer, and has the largest market share in Vietnam's beer sector. It is also among the leading beer companies in Vietnam and Asean.

Vietnam is also the biggest beer market in Asean, and Thai Beverage said that the acquisition dovetails with its target to solidify its position as the largest beverage company in South-east Asia.

"The company intends to develop a long-term relationship with Sabeco's management team and stakeholders. With our mutual experiences and capabilities in the beverages sector, we intend to collaborate with them in future within the region and this will also help us become a global player," it said.

For illustrative purposes, Thai Beverage also said that assuming the acquisition had occurred in the latest financial year, its consolidated earnings per share would decrease from S$0.057 to S$0.055, and its consolidated net tangible asset per share would increase from S$0.207 to S$0.241.