Vietnam government to sell beer shares

Vietnam’s largest brewer, Sabeco, is selling a 53% government stake in the company to private investors.

The Ministry of Industry and Trade has apparently submitted plans to the prime minister for approval, the sale will see the government’s share in the Saigon Beer Alcohol Beverage (Sabeco) cut to 36%.

According to Thanh Nien News, the company chairman, Phan Dang Tuat, said: “All the shares will be auctioned. But we haven’t decided on a price yet.”

The news will excite local and foreign investors, many of whom have been waiting for further shares to become available since Sabeco went public in 2008.

There are reports that alongside three Vietnamese companies, Japan’s Asahi Brewery, Heineken and SAB Miller are all interested, Heineken no doubt keen to expand on its BGI Tien Giang holdings and with good reason.

Vietnam is one of the biggest beer markets in Asia and growing at 10% a year. Sabeco, which brews Vietnam’s biggest labels “Saigon”, reported sales revenue of 29.8 trillion dong (US$1.4bn) last year, with a pre-tax profit of VND3.7trn ($172m).

Competition for shares will be fierce however. Not only are major brewers such as Heineken and SAB Miller keen to expand their business interests in Asia, only one or two buyers are expected to be chosen to bid for the shares.

As for how much they are worth. Last year Thai Beverage offered to buy Sabeco for $2.4bn but this was turned down with the company saying it was worth more than that.

Local media suggests that the 89% share currently owned by the state is worth about $270m.

The Vietnamese government is currently selling off shares in a number of national interests as it seeks to spur economic growth to a four-year high of 6.2% this year.