Masan uses M&A to increase shareholder value

Masan Group's representative receives an award at the Deal Awards 2009-2023. Photo courtesy of Masan Group

Expansion into retail sector

Since being listed on the stock market in 2009, Masan Group has carried out a series of mergers and acquisitions (M&A) deals, including those with Vinacafe Bien Hoa Company, Quang Ninh Mineral Water, Mobicast, and Trusting Social.

The most prominent deal was the brand investment to buy shares of the VinCommerce retail chain in 2019, thereby making Masan one of the largest consumer-retail groups in Vietnam.

But M&A is only one of many tools for Masan Group to create value for shareholders. M&A cannot replace value creation through strategic vision and execution steps that transform the foundation of a business.

After taking over VinCommerce (now renamed WinCommerce), Masan faced a series of challenges when suffering losses of more than US$100 million from this retail chain while not having much operating experience in this field. Masan's stock price dropped by half only one month after the deal.

To turn the situation around, Masan implemented a series of drastic measures, such as closing more than 700 mini supermarkets, replacing them with new, more advanced models, streamlining the product portfolio, and optimizing and negotiating with suppliers to optimize costs while improving supply chain efficiency.

WinCommerce now has the largest scale of sales points in Vietnam, with more than 3,600 supermarkets and stores. WinMart/WinMart+/WIN nationwide has launched the "good price" strategy throughout the chain. This business is committed to accompanying consumers in a difficult economic context.

Customers buy groceries at WinMart. Photo courtesy of Masan Group

The foundation of the "good price" strategy is driven by products manufactured by Masan Consumer (a member company of Masan Group) and distributed on the WinCommerce system.

In addition, WinCommerce also owns Supra, a logistics company launched in early 2022 with the goal of serving Masan Group's ecosystem and helping consumers and partners save as much as possible.

Currently, Supra owns a distribution center system consisting of 10 warehouse clusters (including dry storage and cold storage) in all three regions. Supra is responsible for delivering 60% of WinCommerce's total goods output.

On average, Supra's dry warehouses transport about 454 tons of goods per day, and cold storage transports about 275 tons.

The company also applies technologies such as AI (artificial intelligence) in the stages of ordering, delivering, sorting, and selecting goods at the warehouse, centrally controlling product quality at the warehouse, and ensuring quality. The quantity of goods transported to the system is consistent, and costs are optimized.

Expansion into digital services

In addition to the retail sector, Masan has expanded into the field of digital services and increased the integration of AI (artificial intelligence) and ML (machine learning) into retail consumption platforms.

In September 2021, Masan bought 70% of Mobicast's shares, with a total cash value of VND295.5 billion (US$12.2 million). In April 2022, Masan spent US$65 million to buy 25% of Trusting Social Company.

To serve nearly 15 million knowledgeable consumers who regularly use digital services, the group needs a solution to integrate digital products and services into the consumer platform.

Expanding into the telecommunications field is the first step for Masan to digitize the "Point of Life" consumer ecosystem and bring a seamless integrated product and service experience from offline to online.

Danny Le, General Director of Masan Group, said that at Masan, technology is considered the future factor that will transform the consumption picture and is one of the strategic pillars that need to be prioritized.

The only difference is that the group does not view technology as a standalone business model but as a powerful tool to personalize product offerings to give consumers a superior experience.

"Applying technology to solve major unmet consumer needs is the way to achieve growth, increase profits, and, most importantly, carry out the mission of improving material life and spirit for Vietnamese people," Danny added.

Phuc Long was one of the three deals that bring Masan Group to the Top 10 outstanding deals of Vietnamese businesses buying Vietnamese businesses in the period 2009–2023. Photo courtesy of Masan Group

At the 2023 M&A forum, Masan was honored with six awards, including three in the top 10 outstanding deals of Vietnamese enterprises buying foreign enterprises in the period 2009–2023.

In particular, Masan bought the Nui Phao project in 2010. Masan Tungsten, a subsidiary of Masan High-Tech Materials, also acquired the tungsten business platform of H.C. Stack Group GmbH in 2020. And in 2022, the group bought 15% of Nyobolt Limited.

It also achieved three awards in the Top 10 outstanding deals of Vietnamese businesses buying Vietnamese businesses in the period 2009–2023, by acquiring VinCommerce and VinEco (part of Vingroup) in 2019 and buying 85% of Phuc Long in 2022. Masan Consumer, a subsidiary of Masan, bought VinaCafé Bien Hoa in 2011.