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Central, partner buy Big C VN

Apr 29. 2016
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By KWANCHAI RUNGFAPAISARN
THE NA

8,451 Viewed

CENTRAL GROUP in partnership with Nguyen Kim Group yesterday announced the acquisition of Big C Vietnam from France’s Casino Group for 920 million euros (Bt36.6 billion).

Central said the acquisition represented the strength of its will to keep expanding its business in Asia.

“Central Group and Nguyen Kim Group have officially acquired Big C Vietnam, which has been operated for more than 18 years,” said Tos Chirathivat, chief executive officer of Central Group.

He said Big C Vietnam had 43 stores nationwide, comprising 33 hypermarkets and 10 convenience stores, and 30 shopping malls. “Total revenue in 2015 was approximately 586 million euros.”

Central Group Vietnam was founded in 2011 with its business partner Nguyen Kim. This business collaboration was very successful. They continued to expand their business, and finally acquired Big C Vietnam.

Central Group Vietnam currently operates two Robins department stores in Hanoi and Ho Chi Minh City, as well as two Marks & Spencer stores, 27 Supersports stores, 21 Nguyen Kim stores selling electronic goods, and 13 branches of Lan Chi Mart retail and wholesale food stores in Vietnam.

Nguyen Kim was founded in 2001, and became one of the leading electronics retailers in Vietnam. Central Group acquired 49 per cent of Nguyen Kim last year.

Casino yesterday on its official website announced the closing of the sale of Big C Vietnam to Central Group, for an enterprise value of 1 billion euros, implying 2015 multiples of 1.8 times net sales, 20.4 times EBITDA (earnings before interest, taxes, depreciation and amortisation) and 34.4 times EBIT.

The proceeds to be received by the Casino Group will amount to 920 million euros.

Casino Group recently reached a deal worth 3.1 billion euros to sell its Big C operations in Thailand to Berli Jucker, a listed manufacturing and trading company owned by tycoon Charoen Sirivadhana-|bhakdi.

Big C operates a large network of more than 700 stores in Thailand, including 126 hypermarkets, with a sales revenue of Bt119.6 billion in 2015.

Casino Group has made significant investments for more than 18 years to develop its subsidiary Big C in Vietnam.

Big C Vietnam has built strong relationships with its Vietnamese suppliers and farmers, its customers, its employees and the local authorities and communities, which allowed the development of modern retail in the country.

Central Group in partnership with Nguyen Kim says it will continue the strategy of Big C Vietnam, notably regarding sourcing of goods produced in Vietnam for Big C stores.

Casino says it will continue its sourcing activity of Vietnamese food products distributed in France, Brazil and Colombia. After the disposal of its subsidiaries Big C Thailand and Big C Vietnam, the deleveraging plan of the Casino Group reaches 4.2 billion euros.

According to the Thailand-Vietnam Business Council, imports of Thai products by Vietnam expanded almost two-fold to US$8.2 billion (Bt286 billion) in 2015 compared with 2009.

The average growth rate of retail sales in Vietnam has been in double digits over the last five years.

Modern trade accounts for only 18 per cent of the country’s total retail sales, suggesting huge growth potential.

As of December, there were 415 Thai investment projects in Vietnam with registered capital of $7.36 billion.

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