Vietnamese realty major Vingroup spent $833.9m on local M&As deals 2015

April 5, 2016:   2015 proved to be a busy year for Vietnam’s property conglomerate Vingroup spent VND18.76 trillion (nearly $833.9 million) to acquire domestic realty businesses, according to the company’s audited financial statement.

The largest ticket-sized deal, closed in December last year, was the acquisition of 100 per cent interest in Hoa Huong Duong Company for VND5.680 trillion.

With the deal, Vingroup has garnered a 98.3 per cent voting right in Vinaconex-Viettel Urban Development JSC, the subsidiary of Hoa Huong Duong Company. 

The real estate major has expressed interest in developing property projects in Nam Tu Liem District of Hanoi through the M&A of Hoa Huong Duong as well as a spate of other local real estate firms like Ngoi sao xanh (Blue Star), Me Tri Sports and Entertainment Development JSC and Metropolis Hanoi Co Ltd, as stated by the financial report.

Vinaconex-Viettel Urban Development is reportedly building a 215-hectare project in this location.

With real estate as the core business, the majority of Vingroup’s M&A portfolio were property developers. There were also subsidiaries based in Bac Ninh, north of Vietnam, and southern cities, to facilitate the company’s presence across the country.

Meanwhile, retail was the second most focused vertical of the group. In 2015, Vingroup took over Vinatexmart from textile giant Vinatex Group and merged it with Vincommerce, another fully owned unit. Later on, the company acquired 100 per cent equity of An Phong Investment JSC, the operator of Maximark supermarkets, for an estimated cost of VND1.835 trillion.

In addition, Vingroup purchased two logistics companies last year, to “support the operation of the units within the group, especially retailing”. While it fully owns Sieu Toc Logistics, or VinExpress, the property major acquired 80 per cent of Hop Nhat Group and rebranded it into Vinlinks.

The new area that Vingroup forayed into in 2015 was agriculture through the purchase of a major stake in a farming company, now VinEco Tam Dao – which is part of the food producing and farming chain to provide for Vingroup’s retail business.

The company forayed into the state company IPO market last year by acquiring over 89.4 per cent of the Vietnam Exhibition and Fair Centre (VEFAC).

Vingroup initially came in as VEFAC’s strategic investor with a 80 per cent holding, before it bought the remaining unsold shares during VEFAC’s IPO in March 2015.