Thai billionaire wants to buy Vinamilk to compete with Coca, Pepsi

Fraser & Neave - the beverage company owned by Thailand's richest man - Charoen Sirivadhanabhakdi is looking to increase its market share in Southeast Asia with its deep pockets.

One potential target is Vietnam Dairy Products Company (Vinamilk - Stock code: VNM), said Mr. Lee Meng Tat - CEO of the company's non-alcoholic beverage division. Vietnam's largest dairy company meets all the criteria for F&N's acquisition ambition - a large presence, many famous brands and a wide distribution network.

"The ideal would be to acquire, of course. Acquisitions would help us capture the market much faster," said Lee. In Southeast Asia, the beverage company is in third place, far behind two American giants, PepsiCo and Coca-Cola.

Thailand's richest man - Charoen Sirivadhanabhakdi. Photo: Forbes

F&N had S$971.8 million in cash and cash equivalents as of the end of June. This was boosted by the sale of Myanmar Brewery in August last year, three years after it disposed of its stake in Asia Pacific Breweries.

In Southeast Asia, F&N is also planning to penetrate from the beginning, if it fails to carry out the acquisition. Vinamilk is currently the largest company in Vietnam by capital. F&N is also the second largest shareholder in this company (holding 11% of capital), after the State Capital Investment Corporation (SCIC). At the end of July, Vinamilk was also allowed by the State Securities Commission to increase the foreign room to 100%.

Previously, in November 2015, the news that F&N planned to buy 45% of Vinamilk shares for 4 billion USD caused the dairy company's shares to reach a record of 123,000 VND. However, F&N later denied the news. They affirmed that "they have not sent any offer to Vinamilk or SCIC regarding the purchase of SCIC's shares in Vinamilk", Reuters quoted F&N's announcement as saying.

F&N's main brands include 100Plus sports drinks and Ice Mountain bottled water. They also distribute products from companies owned by the Thai billionaire, such as Oishi Group and Thai Beverage.

F&N is among the top three carbonated water brands in Singapore, Thailand and Malaysia, according to research firm Euromonitor International. However, it is not in the top five in Vietnam, Indonesia and the Philippines, markets where the company is looking to grow.

Charoen has recently planned to expand across Southeast Asia, after completing the acquisition of F&N in February 2013. The billionaire aims to make F&N and other companies' food and beverage businesses - Thai Beverage, Sermsuk and Oishi - among the top 3 brands in Southeast Asia by 2020.

Earlier this year, the billionaire's Berli Jucker Group also completed the purchase of Metro Cash & Carry Vietnam for 655 million euros (about 879 million USD).

According to VNE