HO CHI MINH CITY (Reuters) – Vietnam will kick off next month the sale of a majority stake in Sabeco SAB.HM, the country’s biggest brewer and maker of the Bia Saigon and 333 beer brands, in an ambitious deal the government hopes will rake in at least $5 billion.
The country’s biggest-ever and long-delayed state sale, set for Dec. 18, has already attracted interest from brewers seeking access to one of the world’s most attractive beer markets and the largest in Southeast Asia.
Many foreign firms from Japan’s Asahi Group Holding (2502.T) to Belgium’s AB Inbev (ABI.BR) have shown an interest in Sabeco, or Saigon Beer Alcohol Beverage Corp, since it was earmarked for privatization. Dutch brewer Heineken (HEIN.AS) currently holds a 5 percent stake in the Vietnamese firm.
But analysts say the tripling of Sabeco’s share price to 340,000 dong ($14.96) from its December 2016 listing, and a foreign ownership limit of 49 percent could deter some global brewers from participating in the stake sale.
“The big sale is to increase the attractiveness,” a Vietnam trade ministry official, Truong Thanh Hoai, said at a press conference on Wednesday, days after Sabeco held investor roadshows in Singapore and London.
The minimum sale price has been set at 320,000 dong a share.
Foreigners already own more than 10 percent in Sabeco, and the total limit for such ownership is capped at 49 percent. The government owns nearly 90 percent of Sabeco and analysts say the low float in the market has inflated the market value.
Sabeco’s shares are trading at a price-to-earnings multiple of 49 compared with 20 for Asahi, 17 for Thai Beverage PCL (TBEV.SI) and 15 for Japan’s Kirin Holdings (2503.T), Thomson Reuters data showed.
The Sabeco sale could provide a blueprint for other privatizations that Hanoi is considering as part of broader economic reforms, including that of peer Habeco BHN.HM, in which Danish brewer Carlsberg A/S (CARLb.CO) owns 17.3 percent.
Hoai said he expected a stake sale in Habeco to be completed in the first quarter of 2018, pending talks with Carlsberg and government approval. Hoai said AB Inbev had expressed interest.
The government is pushing ahead the privatization process against the backdrop of a 40 percent rally in Vietnam’s broader equity market .VNI over the past year to 10-year highs.
Around 85 investors attended Sabeco’s roadshows and private meetings in Singapore and London, including representatives from AB Inbev, Asahi and Kirin, Sabeco Chairman Vo Thanh Ha said.
“Through the two recent roadshows, we saw a very high level of interest. Most investors highly valued Sabeco’s business performance and the potential of the beer market,” he said.
AB InBev told Reuters it is committed to Vietnam and to growing its business for the long-term. The company said it does not comment on rumors or speculation.
Sabeco is planning to launch one to two products and drive up its market share to 42-43 percent next year, from about 41 percent now, CEO Nguyen Thanh Nam told investors.
Vietnam is shaping up as a battleground for global brewers thanks to a youthful population and beer-drinking culture.
The country’s per-capita beer consumption is forecast to rise to 47.8 liters by 2021 from an estimated 40.6 liters this year, making it the biggest Asian consumer on a per capita basis, data from research firm Euromonitor International shows.
The president of the Philippines’ San Miguel Corp (SMC.PS) has told Reuters that the conglomerate was looking to bid for Sabeco.
($1 = 22,720 dong)