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FRIDAY, June 09, 2023
Central Group in talks to buy Vietnam's biggest mall operator

Central Group in talks to buy Vietnam's biggest mall operator

THURSDAY, March 30, 2023

Thailand's Central Group is in talks with Vietnam’s largest conglomerate, Vingroup, to buy a stake in its shopping mall unit, news agencies reported on Thursday.

Retail giant Central is eyeing Vincom Retail, which is Vietnam's biggest shopping mall operator with a market value of US$2.8 billion (about 98 billion baht).

Vingroup controls almost 60% of Vincom Retail’s shares.

Vingroup is in negotiations with Central Group and other companies to sell a stake in its shopping mall arm as it seeks to bring in strategic investors, Reuters reported, citing information from five sources.

Earlier this month, Vietnamese media reported that Central Group was planning to take over a rival mall operator in the country but did not name Vincom Retail.

“Vingroup is open to selling a majority stake but no final decision has been taken and discussions with potential buyers are ongoing,” said the report, quoting three unnamed sources.

A potential deal for a majority stake in Vincom would be one of the largest mergers and acquisitions in Vietnam in recent years, Vietnamese media reported.

Both Vingroup and Central Group declined to comment on the matter, Reuters said. The Investor, the online magazine of Vietnam’s Association of Foreign Invested Enterprises, said the size of the stake being negotiated "is not known due to the sensitivity of the matter, but Central Group executives have been seen meeting with Vincom Retail representatives in Ho Chi Minh City, where Central Group Vietnam is headquartered."

Vincom Retail owns 83 shopping malls in Vietnam. The country of 80 million people has the fastest-growing economy in Asia, registering 8% annualised growth last year.

The company was spun off from Vingroup and listed on the Ho Chi Minh stock exchange in 2017.

Vincom Retail's shares have gained 11% so far this year versus a 5% rise in the benchmark stock index.

The negotiations come as Vingroup, whose businesses are spread across real estate, resorts to automobiles, is pouring in billions of dollars to develop loss-making VinFast, its fledgling electric vehicle car maker, and expand in the United States.

VinFast delivered its first 45 cars to customers in California this month, its first sales outside Vietnam, capping a five-year ambitious plan to develop an auto production hub in the country for export to markets in North America and Europe.

Vietnam’s economy slowed sharply in the first quarter of this year, with growth coming in at a much weaker than expected 3.3%, as its exporters were hit by rising costs and weaker demand, its General Statistics Office reported on Wednesday.

The agency said that the slowdown in the January-March quarter from 5.9% year-on-year growth in the last quarter of 2022 was nearly as severe as that during the beginning of the pandemic and the second lowest for the first quarter in 12 years.

Vietnam has been one of Asia’s most dynamic economies in recent years, buoyed by strong foreign investment in electronics manufacturing and other light industries. But efforts to slow economies in Europe and North America to fight stubbornly high inflation are denting demand for consumer goods and other products exported from Vietnam.