Metro Vietnam acquisition by Thai retail giant under scrutiny

By Bach Duong   May 4, 2016 | 10:20 pm GMT+7

The Ministry of Industry and Trade has asked a Thai investor to clarify its Metro Cash & Carry Limited Company acquisition deal in pursuance of Vietnam’s Law on Competition.

The Vietnam Competition Authority under the Ministry of Industry and Trade has sent an official request for confirmation of the deal to MM Mega VN Limited Company (formerly Metro Cash&Carry Vietnam Limited Company).

Ho Chi Minh City's Union of Business Associations previously asked the MoIT to examine the legal compliance of foreign retail enterprises to ensure fair competitiveness in this time of international integration.

metro-vietnam-acquisition-by-thai-retail-giant-under-investigation

Metro Vietnam has been bought by a Thai retail giant. Photo by VnExpress

The ministry will review deals conducted from 2014 to 2015 and ask MM Mega Limited Company to clarify the transaction process and procedures for the Metro Cash&Carry Vietnam acquisition deal.

Amid concerns of market dominance after acquiring Metro, the ministry has requested MM Mega Limited Company to provide a report on its aggregate market share from 2013 to 2014, which the Thai retailer needs to submit before May 30.

According to the Vietnam Competition Authority, Metro Cash&Carry Vietnam changed its business registration certificate on January 25, 2016 to adjust the company's name to MM Mega Limited Company. This company operates in Vietnam and therefore needs to comply with the Law on Competition.

At the beginning of 2016, Berli Jucker Corporation (BJC), belonging to Thai billionaire Charoen Sirivadhanabhakdi, completed the Metro acquisition deal. BJC spent nearly $880 million to purchase the chain of 19 wholesale points and the relevant real estate investment portfolio of Cash&Carry Vietnam.

Foreign retail giants, especially from Thailand, have been buying up large retail chains in Vietnam in recent time. Most recently, Central Group (Thailand) invested over $1 billion to buy the BigC chain.

Numerous domestic enterprises have found it difficult to sell their goods and products through supermarkets acquired by foreign investors. Local retailers say that Vietnamese products that meet quality standards can easily access domestic supermarkets but find it difficult to penetrate foreign supermarkets in Vietnam.

Metro has already paid taxes of VND1.9 trillion ($86 million) from the BJC deal to the state budget, of which 22 percent will go to the Ho Chi Minh City Tax Department.

The Metro brand first appeared in Vietnam in 2002 and currently has 19 wholesale centers nationwide with 3,600 staff. In the 2014-2015 fiscal year, Metro Vietnam's revenue reached $550 million.