Vingroup and Masan to merge units to create a consumer retail giant

The conglomerates’ agreement aims to optimize strength of business activities from creating a new consumer goods - retail giant with outstanding competitiveness in local market.

According to initial agreement, VinCommerce and VinEco, and Masan Consumer will merge to establish a Vietnam's leading consumer group. Masan Group will take control of the operation of the new group and Vingroup is a shareholder.

Currently, the two sides are carrying out necessary legal procedures to sign the official contract. Deal value has not been disclosed, but this could be the biggest deal of this year. 

The newly-established company will operate a retail system of more than 2,600 supermarkets and VinMart, VinMart + stores in 50 provinces and cities with millions customers as well as a system of 14 high-tech farms of VinEco.

After 5 years of establishment and development, VinCommerce and VinEco have initially completed the target set out by the group.

VinEco has also achieved the goal of promoting and inspiring domestic businesses to invest heavily in high-tech agriculture, supporting small-scale production households to promote clean agriculture, ensuring long-term health for Vietnamese people.

Photo courtesy of Vingroup

The deal expected to maximize the core competencies of each party from developing a new enterprise with outstanding value. The new company could be Vietnam's retail giant.

Vingroup, which started its auto assembly firm VinFast this year, agreed to the merger so it can focus more on manufacturing and technology, according to the statement. 

“The deal will maximize the core competencies of each party to develop a new enterprise,” the statement said, adding the move will lead to “the development of Vietnam’s consumer-retail industry toward regional scale.”

The agreement will allow Masan “to quickly achieve our goal of becoming the leading domestic retail and consumer group,” Truong Cong Thang, chairman of Masan Consumer, said in a separate statement.

Vingroup is Vietnam's largest real estate company and deals in a wide range of properties, including houses, shopping malls, hotels, golf courses and hospitals.

It has enhanced its brand cachet by targeting its Vincom shopping malls and Vincom Village residential areas at affluent customers.

Vingroup is about 30% owned by its largest shareholder and founder Pham Nhat Vuong. Foreign investors have a combined interest of about 15%. Market capitalization, at approximately $3 billion.

It is the largest among non-state-run companies and ranks among Vietnam's top five concerns when including state-owned entities.

Masan Consumer is one of Vietnam's largest local diversified FMCG companies. It manufactures and distributes a range of food and beverage products, including soya sauce, fish sauce, chili sauce, instant noodles, instant coffee, instant cereals and bottled beverages.

The company commenced operations in 2000 has created and owns some of the most recognized and trusted consumer brands such as Chin-Su, Nam Ngu, Tam Thai Tu, Omachi, Kokomi, Vinacafé, Wake Up, Kachi and Vinh Hao.