Fraser and Neave, Limited (F&N) has announced plans to acquire an additional 4.6% stake in Vietnam Dairy Products Joint Stock Company (Vinamilk), increasing its total shareholding to 24.99%. This strategic move underscores F&N’s commitment to strengthening its position in Southeast Asia’s burgeoning dairy sector. The acquisition, facilitated through F&N’s wholly-owned subsidiary F&N Dairy Investments Pte Ltd, is expected to be completed within 35 days via the Ho Chi Minh Stock Exchange.
Vinamilk, a leading dairy company in Asia, is renowned for its robust brand portfolio and extensive distribution network. F&N’s increased investment reflects confidence in Vinamilk’s growth potential and operational strengths. The transaction aims to leverage synergies in dairy farming, manufacturing, and distribution, enhancing F&N’s regional strategy.
The purchase price for the shares is set at approximately S$3.07 each, totalling around S$295m. This valuation was determined through arm’s length negotiations, considering Vinamilk’s financial performance and market analysis. The acquisition will be funded through a mix of internal resources and external borrowings.
F&N’s decision to expand its stake in Vinamilk aligns with its long-term growth strategy in Vietnam’s dynamic dairy market. The company believes that Vinamilk’s established business and strong cash flow generation provide a solid foundation for future growth. With this acquisition, F&N aims to further capitalise on the opportunities within the region’s dairy industry.
