Singapore-listed Jardine Cycle & Carriage has now extended its reach to the lucrative Vietnamese dairy industry.
The conglomerate has paid US$616.6 million (S$839.4 million) for a 5.53 per cent stake in Vinamilk, the company said yesterday. Vinamilk is Vietnam's largest listed company by market capitalisation, with a value of about US$10.9 billion.
Part of the acquisition took place in an auction last Friday, when Vietnam's State Capital Investment Commission (SCIC) put up for auction a 3.33 per cent stake in Vinamilk.
The rest of Jardine C&C's shares were acquired on the Ho Chi Minh Stock Exchange. Jardine C&C's move comes after a decision last year to scrap a foreign ownership limit on Vinamilk shares. The dairy producer - its full name is Vietnam Dairy Products Joint Stock Company - has a 58 per cent market share in Vietnam, with 13 factories and 10 farms. It also has interests in more than 40 countries and territories.
The Vinamilk deal is part of a strategy of investing in market-leading South-east Asian firms, Jardine C&C told the Singapore Exchange.
It added that the move will add to its exposure to the Vietnamese economy, "and consideration will be given, from time to time, to making further such investments".
A Jardine C&C spokesman said: "While the Jardine Cycle & Carriage Group is widely known for its automotive interests, we have always held shareholdings in companies engaged in multi-industry businesses."
Number of dairy factories Vinamilk operates.
Number of cow farms it owns.
Percentage of Vinamilk's market share in Vietnam. The dairy producer also has interests in more than 40 countries and territories.
For instance, Jardine C&C is a key stakeholder in Indonesia's Astra, which, apart from the car industry, is also involved in areas such as financial services and mining, she added.
Jardine C&C has also been upping its stake in businesses such as Vietnam's Refrigeration Electrical Engineering Corporation, and Thailand's Siam City Cement Public Company.
SCIC, still Vinamilk's largest shareholder, sold its stake as part of the Vietnamese government's planned divestment from the dairy firm, and other state-owned enterprises.
Singapore-based Fraser and Neave (F&N), owned by Thai Beverage Public Company, is also a major shareholder - and Vinamilk's biggest foreign investor. It now has an 18.74 per cent stake and two representatives on the Vinamilk board.
Phillip Capital yesterday upgraded F&N's stock to a "buy" call, with the target price raised from $2.53 to $2.83, on the back of Vinamilk's strong contribution to earnings. Jardine C&C shares closed up 39 cents, or 1 per cent, to $39.60, after the announcement.