Acquiring Sabibeco, Sabeco reaches the "throne"

After completing the Sabibeco merger and acquisition (M&A) deal, Sabeco will become the largest beer producer in the country. Sabeco's goal for 2024 is to increase market share and maintain its position as the number 1 beer brand in the Vietnamese market.

Sabeco continues to spend money on M&A and expand production scale to achieve ambitious goals. Photo: Duc Thanh

With the largest production scale, Saigon Beer - Alcohol - Beverage Corporation (Sabeco, code SAB) announced a plan to publicly offer to buy more than 37.8 million shares, equivalent to 43.2% of the capital of Saigon Binh Tay Beer Group Joint Stock Company (Sabibeco, code SBB). The expected transaction time is from October 31 to December 25, 2024, increasing Sabeco's direct ownership of Sabibeco from nearly 14.4 million shares (16.4%) to nearly 52.2 million shares (59.6%), thereby becoming the parent company of Sabibeco. With a purchase price of VND 22,000/share, it is estimated that Sabeco needs to spend nearly VND 832 billion to complete this deal. Notably, this price is about 24% higher than the current market price of SBB shares. In the stock market, SBB shares have recently been moving sideways after a strong increase in August 2024, when the stock moved from around VND 14,000/share to around VND 18,000/share.

In the first 6 months of 2024, Sabeco recorded revenue of about VND 15,300 billion and profit after tax of about VND 2,300 billion, up 5% and 6% respectively over the same period in 2023.

Sabeco said that during the tender offer, it may increase the price (if necessary) to ensure the Company's interests, as well as set out conditions for cancelling the tender offer if the number of SBB shares registered for sale does not reach the minimum ratio of more than 25.1 million shares (28.7% of outstanding shares), or SBB reduces the number of voting shares. Sabibeco is known for the Sagota beer brand, including many draft beer products, canned beer, fresh beer, bottled beer; processed beer products Saigon Special, Saigon Larger, Saigon 333 Export, Saigon Export; barley drinks with lemon and raspberry flavors Malty. According to FPTS Securities Company, after completing the Sabibeco M&A deal, Sabeco's total capacity will increase to 3.01 billion liters of beer/year in 2024, an increase of 25.4% compared to the current capacity and become the beer enterprise with the largest production scale in Vietnam. Surpassing rivals Sabeco continues to spend money on M&A in the context that its competitors in the beer industry have just announced their semi-annual financial reports with revenue continuing to "slide", profits falling, and many businesses narrowing their operations. It is forecasted that the beer industry will continue to face many difficulties in the coming time. According to data from the NielsenIQ (NIQ) retail research department, the domestic beer market currently has 181 participating manufacturing enterprises. Of which, more than 90% of revenue and output belong to 4 major manufacturers, including domestic and foreign-invested enterprises: Heineken, Sabeco, Habeco and Carlsberg. The financial report of Heineken Group (Netherlands) shows that the Company's global beer output decreased by 4.7%, mainly due to the Vietnamese and Nigerian markets. In the Vietnamese market, according to the 2024 Consolidated Semi-Annual Financial Report of Saigon Trading Group (Satra) - the unit owning 40% of the capital at Heineken Vietnam Brewery Company Limited and Heineken Vietnam Beer and Beverage Company Limited (Heineken Trading) - the Company's revenue in the first half of this year reached VND 4,651 billion, down 7% over the same period last year. The decline in net revenue was not large, but Satra's after-tax profit in the first half of the year decreased by 56% over the same period, reaching only VND 792 billion. Heineken Vietnam Brewery Company Limited also sent a document to the People's Committee of Quang Nam province regarding the temporary suspension of the Heineken Vietnam Brewery Project - Quang Nam branch. Although this is only a small-capacity factory, Heineken's move still reflects the unprecedented difficulties that the company is facing. In fact, not only Heineken, many domestic beer companies also saw a decline in profits in the first 6 months of this year. Specifically, Habeco achieved a net profit of VND151 billion, down 18% year-on-year; Saigon - Western Beer Company achieved a profit after tax of VND42 billion, down 18% year-on-year; Saigon - Phu Tho Beer Company lost more than VND1 billion... Sabeco alone recorded a slight profit in the first half of this year. Sabeco's leadership said that the economy improved in the first half of the year, but the implementation of Decree 100/2019/ND-CP (administrative penalties in the field of traffic) was still strict and competition in the market was increasingly fierce. Sabeco's net revenue was higher than the same period in 2023 mainly due to the positive impact of price increases. At the Annual General Meeting of Shareholders held in April 2024, Sabeco approved a revenue plan of VND 34,397 billion, an increase of 13% compared to 2023; profit of VND 4,580 billion, an increase of 7.6%. Sabeco's goal in 2024 is to increase market share and maintain its position as the No. 1 beer brand in the Vietnamese market. Source: https://baodautu.vn/thau-tom-sabibeco-sabeco-vuon-toi-ngoi-vuong-d228952.html