M&A strategy to serve consumer growth

Masan Group is known as the most dynamic enterprise in implementing mergers and acquisitions (M&A). Through these deals, Masan is increasingly perfecting its ecosystem to bring higher value to consumers.

Masan's M&A strategy to serve consumer and retail growth

Masan Group is known as the most dynamic enterprise in implementing mergers and acquisitions (M&A). Through these deals, Masan is increasingly perfecting its ecosystem to bring higher value to consumers.

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M&A in the strategy of building a consumer - retail platform

On November 27, at the Vietnam Enterprise M&A Forum organized by Dau Tu Newspaper, Masan Group was honored as the Enterprise with the typical M&A strategy 2023 - 2024.

Some typical deals of Masan include: penetrating and holding more than 98% of Vinacafé Bien Hoa; buying control of NET detergent, Quang Ninh mineral water, beer company; controlling the interests of Saigon Nutrition Food Company; buying Sam Kim Company Limited, changing its name to Masan Nutri-Science and then changing it to Masan MEATLife; buying the VinCommerce retail chain (now renamed WinCommerce), or buying controlling shares of the Phuc Long tea and coffee chain...

Despite carrying out many M&A deals, Masan is not a company that specializes in M&A deals, entering many different fields to quickly increase revenue. Mr. Danny Le, General Director of Masan Group said: “When buying shares in other companies, whether at the strategic level or controlling shares, Masan always determines not to buy revenue or profit, but to buy a 'platform' to serve the Group's overall strategy. From a fast-moving consumer goods manufacturing company, through M&A, we have gradually perfected the consumer - retail ecosystem according to the 'Point of Life' strategy to serve customers and end consumers".

The recent deals made by Masan all focus on the consumer-retail platform, better taking advantage of growth opportunities to serve consumers.

At the shareholders' meeting in April 2024, Masan said that it would not do much about M&A in the near future. Instead, Masan will focus on optimizing business operations with a focus on the core consumer - retail business segment.

It can be seen that the recent deals made by Masan all focus on the consumer - retail platform, either to increase resources to better take advantage of growth opportunities serving consumers, or to increase ownership in core business segments or gradually divest from non-core business segments.

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In early October 2023, Bain Capital - the world's leading private equity fund committed to invest at least 200 million USD in equity in Masan Group. More than 2 months later, Bain Capital announced to continue increasing the investment to 250 million USD. Despite short-term fluctuations in the financial market, as well as the "easy money" period has passed, the increase in investment scale of Bain Capital shows strong confidence in the Vietnamese market and Masan's consumer-centric strategy. The capital from Bain Capital is in line with Masan's strategy to strengthen its financial position, helping the company better take advantage of growth opportunities to serve the needs of 100 million Vietnamese consumers, including necessities, financial services and other basic daily needs.

The transaction was completed by both parties on April 22, 2024. Masan said that it is continuously investing in existing platforms and constantly innovating to always be ready when the consumer market recovers. The group's goal is to become a factor that brings many times more profit in the "golden moment" of the consumer story in Vietnam.

Previously, the total capital that the Group has mobilized from abroad since 2007, including equity and debt, is more than 5 billion USD. Funds such as KKR, TPG, SK Group... have invested in Masan 3 times, some other investors have also invested in Masan 1-2 times. It can be seen that Masan has a clear strategy and effective implementation so that a series of "big guys" have invested in this group many times.

Vietnamese goods account for over 90% at WinMart

Reduce ownership of non-core business segments

On May 14, 2024, Masan High-Tech Materials, a subsidiary of Masan Group, announced that it had reached a framework agreement with Mitsubishi Materials Corporation Group (MMC Group) with many strategic contents. Accordingly, MMC Group plans to acquire 100% of HC Starck Holding (Germany) GmbH (HCS) from Masan High-Tech Materials (MHT). The two parties will sign an offtake agreement for APT and tungsten oxide that will bring long-term benefits to both parties. Masan will retain ownership in Nyobolt, a UK-based company specializing in providing fast-charging Lithium-ion battery solutions. At the same time, Masan will retain the privilege of enjoying a portion of the potential profits when the "black mass" recycling technology developed by HCS is commercialized.

On the other hand, on September 4, 2024, Masan Group announced the transfer of 7.1% of WinCommerce shares from SK Group. WinCommerce (WCM) is the company that owns and operates the largest modern retail chain in the country. Increasing ownership in WCM helps MSN increase its control and promote long-term growth of its core business.

“WinCommerce has entered the profitability phase. We expect this trend to continue to accelerate as we achieve Like-For-Like growth, successfully open new stores, and drive the development of the Vietnamese modern retail market in the medium term,” said Danny Le, CEO of Masan Group.

In Q3/2024, WinCommerce recorded a 9.1% year-on-year revenue growth, reaching VND8,603 billion across the system, mainly contributed by the new store models WIN (serving urban shoppers) and WinMart+ Rural (serving rural shoppers). Profit after tax reached VND20 billion in Q3/2024 - the first quarter with net profit since the Covid period. This is a clear sign of a sustainable profit path in the coming time.

With the successful identification of a profitable retail model, the retail chain has resumed its store openings. WinCommerce's strategic focus in the last quarter of 2024 is to continue to achieve positive after-tax profits, accelerate growth, and accelerate store openings to reach the target of 4,000 points of sale by the end of this year.

Source: https://baodautu.vn/chien-luoc-ma-phuc-vu-tang-truong-tieu-dung---ban-le-cua-masan-d231805.html