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Central denies reports it is in talks to buy Vietnam’s largest mall operator

Central denies reports it is in talks to buy Vietnam’s largest mall operator

FRIDAY, March 31, 2023

Central Retail Corp (CRC) on Friday denied reports that it is in talks with Vietnam’s largest conglomerate, Vingroup, to buy a stake in its shopping-mall unit.

A statement signed by CRC CEO Yol Phokasub said the Stock Exchange of Thailand had contacted CRC after reports saying Central Group was in talks to buy Vincom Retail were published on the websites of news outlets Krungthep Turakij and Kaohoon.

"The company has not acted as described in the news report," the statement said.

A report by Reuters said Central Group was 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.

The Reuters report said five unnamed sources had told it that Vingroup was in talks with Central Group and other companies to sell a stake in Vincom Retail to bring in a strategic investor.

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.

The Reuters report said: “Vingroup is open to selling a majority stake but no final decision has been taken and discussions with potential buyers are ongoing.” It attributed this information to three unnamed sources.

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

Central denies reports it is in talks to buy Vietnam’s largest mall operator

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.