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Mobile World to spend $111m on MA deals

Update: August, 05/2017 - 09:00
Inside a retail store of Mobile World Corporation in the northern province of Phú Thọ. — VNS Photo Đoàn Tùng
Viet Nam News

HÀ NỘI —Mobile World Corporation, one of the biggest mobile phone and accessory retailers in Việt Nam, is preparing to take over local electronics and pharmacy retail firms for VNĐ2.5 trillion (US$111.1 million).

The company’s chairman Nguyễn Đức Tài said at an event on Thursday that the management board is about to ask shareholders for approval.

If approved, the deals would be carried out right away as negotiations had been completed, he said.

“Market researchers may find out what electronics and pharmacy retail chains are targeted, however, I cannot reveal details of the deals in public as they remain confidential.”

Mobile World Corporation (MWG) said at its annual shareholder meeting, which was held in late March, that the company would acquire all electronics retail firms and pharmaceutical distributors via M&A deals for less than VNĐ500 billion.

In the past quarter, MWG posted a yearly increase of 56 per cent in revenue, which reached VNĐ15.6 trillion. Its net profit rose 22.5 per cent to VNĐ511 billion in the second quarter.

After the first six months, MWG recorded VNĐ31.2 trillion in revenue, a year-on-year increase of 59 per cent, and VNĐ1.06 trillion in post-tax profit, an annual gain of 28 per cent.

The company targets to raise revenue by 35 per cent annually to VNĐ63.28 trillion and increase post-tax profit by 29 per cent to VNĐ2.2 trillion.

By the end of June, MWG had established 1,527 retail stores to sell electronics, digital devices, vegetables and consumer goods.

The company runs three major brands, which are Thế Giới Di Động, Điện Máy Xanh and Bách Hóa Xanh. The number of retail shops for those brands were 1,013, 404 and 110, respectively.

Potential targets

Local media reported that Trần Anh Digital World JSC (Trần Anh) could be the potential target for MWG as the company is headquartered in Hà Nội, which could help MWG expand its market coverage in the northern region.

If MWG plans to acquire Trần Anh, the deal would not be complicated as the ownership of Trần Anh is dense, with the two biggest shareholders holding nearly 90 per cent of the company’s capital.

In the past quarter, Trần Anh posted VNĐ1.05 trillion in net revenue, a decline of 4 per cent from the same period of 2016, and VNĐ2.6 billion in post-tax profit, down 73 per cent year on year.

Shares of Trần Anh, listed on the Hà Nội Stock Exchange as TAG, soared 10 per cent to close at VNĐ33,000 per share.

Meanwhile, the two potential names in the pharmaceutical distribution sector are Phano Pharmacy and Pharmacity.

Phano Pharmacy was established in March 2007 by five people. Four of them hold 85 per cent of the company’s charter capital and the remaining stake is owned by Duy Tân Pharmaceutical JSC. By 2017, the company has established more than 60 drug stores, hiring more than 500 employees.

Pharmacity is a drug store chain managed by Pharmacity JSC. The company started operations in 2012 with four individual shareholders. The company now has more than 40 drug stores, most of which are located in HCM City. — VNS


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