Vietnam’s Kido sells snack business for $90 mln

August 24, 2016 | 01:40 am PT
Foreign confectionary makers are looking to expand in Vietnam through mergers and aquisitions.

Mondelez International Inc., the maker of Oreo cookies and Milka chocolate, has bought out Vietnam’s Kinh Do Corp’s snack business after acquiring the remaining of 20 percent stake for VND 2 trillion ($90 million).

The transaction gives Mondelez 100 percent ownership of Kinh Do Corp.’s snack unit, helping the world's second-largest confectionary company to gain a strong foothold in the Vietnamese market.

Mondelez acquired the majority 80 percent stake two years ago for $370 million as part of the confectionary giant's rapid expansion in emerging markets.

Following the acquisition, the company's brand name will be changed to Mondelez Kinh Do.

In addition to the brand, the buyout will give Mondelez easier access to Vietnam’s market where almost 60 percent of the population of 93 million people is under 35 years old with fast-growing consumer spending.

Kinh Do is widely known in the Southeast Asian country for confectionary products including biscuits, soft cakes and seasonal moon cakes.

Through Kinh Do’s nationwide distribution network, Mondelez will have the chance to launch its existing brands on the market.

Vietnam has recently seen a surge in mergers and acquisition deals in a variety of sectors as foreign investors attempt to tap into the country’s fast-growing consumer population.

Data from EuroMonitor International showed that Vietnam’s consumer spending is set to grow 47 percent in the next four years to $184.9 billion.

Mergers and acquisitions involving Vietnamese companies are forecast to hit a fresh record of $6 billion this year.

Local companies like Kinh Do have been faced with increasing pressure from foreign rivals who want to expand into emerging markets.

Following Mondelez’s buyout, Kinh Do Corp has officially withdrawn from a snack business which used to bring in $175 million in annual sales.

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