Vingroup sell US$1 billion stake to South Korean firm

May 16, 2019 - 22:44

Việt Nam’s real estate, tech and retail conglomerate Vingroup JSC (Vingroup) yesterday signed a billion dollar deal with the Republic of Korea’s SK Group.

Vingroup and SK's leaders at the agreement signing ceremony on Thursday. — Photo courtesy of Vingroup

HÀ NỘI — Việt Nam’s real estate, tech and retail conglomerate Vingroup JSC (Vingroup) yesterday signed a billion dollar deal with the Republic of Korea’s SK Group.

The South Korean technology and telecommunication firm will acquire 154.3 million primary shares in Vingroup and 51.4 million shares of the Vietnamese firm’s VinCommerce for VNĐ23.3 trillion (US$1 billion) or VNĐ113,000 per share.

After the transaction, SK will own a 6 per cent stake and become a strategic partner of the Vietnamese firm, Vingroup said in a statement.

The deal will increase Vingroup’s charter capital to nearly VNĐ34.3 trillion.

The transaction is subject to customary regulatory approvals and the listing of primary shares issued on the Hồ Chí Minh Stock Exchange. Credit Suisse acted as sole advisor to Vingroup.

“We believe partnering with a local champion, such as Vingroup, to explore new business opportunities is an ideal strategy for SK’s expansion in South East Asia,” said Woncheol Park, Representative Director of SK Southeast Asia Investment.

“We are expanding in Việt Nam with a long-term goal of contributing to the local agenda and the economic advancement of the nation. In this regard, we have a lot of respect for Vingroup and the significance of their role in Việt Nam’s economy,” he said.

“Through this strategic partnership, we look forward to working closely with Vingroup and creating vast synergies for both groups and for Viet Nam.”

Vingroup’s Vice Chairman and Chief Executive Officer Nguyễn Việt Quang said Vingroup welcomes SK as a strategic partner and the South Korean firm’s deep-bench experience, solid business foundation and technological achievements will offer invaluable assistance to Vingroup so that the Vietnamese firm can achieve new heights, especially in the fields of industrials and technology.

Vingroup is the largest private-owned group in Việt Nam by market capitalisation, and ranks in the Top 10 Largest Enterprises in Việt Nam (including both FDI and State-owned enterprises).

The company is listing nearly 3.2 billion shares on the Hồ Chí Minh Stock Exchange with code VIC. Its shares gained 1.4 per cent to close Thursday at VNĐ116,900 per share, valuing the firm at VNĐ373.1 trillion.

In 2018, Vingroup announced its vision to become a world-class technology-industrials-services group. In the first quarter of 2019, Vingroup reported VNĐ1 trillion in post-tax profit, up 13 per cent year on year.

Last year, Vingroup sold $400 million worth of preferred shares to Hanwha – another South Korean investor.

SK Group is one of the largest conglomerates in South Korea, with businesses across telecommunications, technology, semiconductors, logistics and services.

In 2018, SK Group bought $470 million worth of food and beverage producer Masan Group. — VNS