In unprecedented move, Vietnam all set to sell stake in top brewers

By    September 1, 2016 | 08:27 pm PT
The country’s thirst for beer has attracted interest from foreign companies.

The Vietnamese government is looking to fully divest from the country's prized beer companies, Sabeco and Habeco, in the next 18 months.

Deputy Trade Minister Do Thang Hai said at a regular cabinet meeting on Wednesday that the government would sell its 89.59 percent stake in Sabeco, officially known as Saigon Beer Alcohol Beverage Corp., for US1$1.8 billion, and 82 percent own in Habeco, officially known as Hanoi Beer Alcohol Beverage Corp., for $404 million.

Both local and foreign investors are eligible to buy into the beer companies.

Sabeco, brewer of Saigon Beer and 333 Beer, is Vietnam's largest brewer by sales with 40 percent of the market last year, followed by Heineken and Habeco with 20 percent shares each, Thanh Nien News reported, citing the Vietnam Beer Association.

The country’s thirst for beer has attracted interest from foreign companies, Bloomberg reported. Thai Beverage PCL, Asahi Group Holdings Ltd. and Heineken NV are among companies interested in Sabeco, the newswire quoted Euromonitor analyst Andrea Lianto as saying.

Beer consumption in the Southeast Asian country jumped about 40 per cent in 2015 from 2010, according to the Vietnam Beer Alcohol Beverage Association. Vietnamese are expected to consume more than 4.04 billion liters of beer this year, the most in the region and up from 3.88 billion litres in 2015, Bloomberg reported, citing Euromonitor International. Its citizens of legal drinking age, 18 and above, is expected to increase to 72.4 million by 2021 from 68.7 million this year, according to Euromonitor.

Vietnam has so far struggled to find foreign investors for state-owned enterprises partly because its offers are too small to be attractive. However, the latest decision to scrap the long standing foreign ownership cap could change the situation as foreign investors are now allowed to own a 100 percent stake in companies in some select industries.

The Vietnamese government is stepping up its efforts to divest from many state-owned enterprises.

This latest push may succeed because this time the government really feels motivated to make it work: It needs the money to gap a widening budget deficit which is forecast to soar to 6.5 percent of gross domestic product this year.

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