Bain Capital increases equity investment in Masan Group to 250 million USD

12/09/2023 06:03 PV Print article

ANTD.VN - According to research by data and analytics company GlobalData, in the first 10 months of this year, the total number of M&A deals in the Asia- Pacific region decreased by 11.6%. Following the general trend, the Vietnamese M&A market is also declining, especially compared to the peak in 2021 with a total deal value of more than 10.8 billion USD. According to data from KPMG Vietnam, in the first 10 months of 2023, the Vietnamese merger and acquisition (M&A) market had 265 transactions, reaching a value of more than 4.4 billion USD and is forecast to be unlikely to reach the figure of nearly 6.8 billion USD of last year. Compared to the same period last year, the M&A market decreased by 23%. Investors also tend to switch to strategic investments, requiring more financial resources.

The slowdown in M&A activity is believed to be influenced by the US Federal Reserve’s (FED) continuous interest rate hikes over the past two years, leading to a wave of interest rate hikes globally. The high interest rate environment has increased the cost of capital for investors and made them increasingly more selective in choosing investment opportunities.

Leading Masan 's billion-dollar capital mobilizations over the years, Mr. Danny Le, CEO of Masan Group, commented that at a time of "high capital costs" like now, investors' patience is only at an average level.

In the past, investors would be patient as they considered whether a company could create a profitable business. "The period when investors would accept losses in a multi-billion dollar company is over," the CEO of Masan Group emphasized.

In a difficult context, the Vietnamese financial market in general and the Vietnamese M&A market in particular continue to be considered attractive by international investors thanks to political stability, impressive economic growth rate, and a rapidly growing domestic consumer market. In particular, the retail consumer market in Vietnam is always considered to have great potential and room for growth. In a 2023 report, JP Morgan emphasized: "Vietnam represents the most vibrant and remarkable consumer growth story in the Asia region".

GDP per capita ($) (Source IMF)

Despite its appeal, experts say only businesses with strategic vision and methodical execution can successfully mobilize foreign investment.

On December 6, 2023, the world's leading private equity fund Bain Capital increased its equity investment in Masan Group to USD 250 million. Previously in October 2023, Bain Capital invested USD 200 million in Masan Group. Despite the fluctuations and challenges of the financial market, Bain Capital's increased investment scale is a strong belief in Masan's long-term strategy and prospects. Depending on capital needs and market conditions, Masan can increase its investment up to USD 500 million.

Masan Consumer tham gia hội chợ xuất khẩu TPHCM

Masan Consumer participates in Ho Chi Minh City export fair

This transaction is an equity investment in the form of Convertible Dividend Preference Shares (CDPS) issued at VND85,000/share and convertible into common shares at a ratio of 1:1. The fixed dividend rate of each CDPS is 0% within the first 5 years from the date of issuance. From the 6th year onwards, the fixed dividend rate of each CDPS is up to 10%/year.

Authorize the Board of Directors to decide on the specific fixed dividend rate and payment time. In addition to the fixed dividend, each CDPS will receive a dividend equal to the dividend per common share (if any). In the 10th year from the date of issuance, outstanding CDPS will be required to convert into common shares of Masan Group.

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Modern WinMart supermarket with a variety of goods on display

In addition, this is an equity investment transaction, with no hedge or borrowing structure for MSN shares resulting in the sale of MSN shares to the market on the issuance date. The structure of the investment is designed to protect the interests of MSN’s existing shareholders. Bain Capital is fully aligned and shares the same vision as MSN’s existing shareholders. Jefferies Singapore Limited and UBS AG Singapore Branch are acting as financial advisors to Masan Group. Masan Group expects the transaction to close in the coming months and will continue to explore other strategic equity solutions.

Masan said it is continuing to invest in existing platforms and constantly innovating to be ready when the consumer market recovers. The group's goal is to become a factor that brings in many times more profit during the "golden moment" of the consumer story in Vietnam.

Khách hàng trải nghiệm sản phẩm Phúc Long

Customers experience Phuc Long products

Bain Capital's investment in Masan Group is among the top three largest equity investments so far in 2023. The other two deals include SMBC buying a 15% stake in VPBank for $1.4 billion and ESR Group buying a stake in BW Industrial for $450 million.

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