Carlsberg promises fair price for Habeco
Danish brewer Carlsberg, currently the strategic investor of Hanoi Beer Alcohol and Beverage (Habeco), has been negotiating for a majority holding in Habeco.
"We are pleased with the progress of the discussions with the representatives of the Ministry of Industry and Trade (MoIT) and Habeco," told Carlsberg's representative to Hanoitimes.
Carlsberg promises fair price for Habeco.
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As Carlsberg has the right of first refusal, it is vital for the two sides to work out the deal before Habeco can proceed with the taking its shares to the stock market in the first quarter of 2018. The major hurdle in the negotiations is believed to be the high share price set by Habeco that exceeds Carlsberg's valuation.
On this matter, Carlsberg stressed that it supports the Government's divestment agenda, thus, "We endeavor to serve as a loyal partner for the Government throughout the divestment process," added Carlsberg's representative.
"Carlsberg has been a strategic investor since 2008 with pre-emption right. However, this does not necessarily mean that we should not pay a fair price for a State asset. We recognize that Hanoi beer brand is a good brand, Habeco is a good company, and we are willing to pay a fair price for acquiring the asset."
The potential deal for a larger Habeco stake, according to Carlsberg, would be in line with the company's long-term investment ambitions in the Vietnamese brewing industry as a whole and its strategic investment in Habeco since 2008.
Understanding the Hanoi beer brands' rich cultural heritage in the minds and hearts of Vietnamese people, Carlsberg's representative stated, "We reaffirm our long-term commitment to Habeco and to the inheritance, stewardship, and promotion of Habeco beer brands after the state divestment."
"Along with our desire to expand our investment in Habeco, Carlsberg will ensure that its brands are supported by sufficient investments, safeguarding its position in North Vietnam, while increasing its presence elsewhere in the country and, potentially, internationally."
On the upcoming plan for Habeco, Carlsberg stressed that its development strategy is driven by the preservation and development of local beer brands, which means investing in local brands instead of internationalizing local companies.
"In many countries, we are not known as Carlsberg, but, for example, as Feldschlösschen in Switzerland or Ringnes in Norway or Kronenbourg in France or Baltika in Russia, and so forth," said the representative.
"During almost 25 years of operations in Vietnam, Carlsberg has cultivated multiple beer brands, including Huda, Huda Gold, and Halida, which are purely Vietnamese beer brands that Carlsberg developed together with our previous Vietnamese joint-venture partners. These Vietnamese brands have since been developed to stand as peers to our global brands in the Vietnamese beer market."
In particular, Huda, Huda Gold, and Halida currently account for more than 90% of Carlsberg Vietnam's total sales revenue in Vietnam. In 2017, Huda Gold won multiple top-tier international awards for its quality.
Carlsberg, for its part, has the highest hopes and expectations for the Vietnamese brewing industry.
Last December, Vietnam Beverage, a unit of Thai Beverage, successfully acquired 53.59% Sabeco shares for US$4.8 billion. The deal represents the endorsement of the hard work that has gone into establishing the Sabeco and Habeco brands, as well as the potential for further development of the sector, said Carlsberg's representative.
The state's divestment from Sabeco and Habeco, thus, is expected to enable further investment into Vietnam's homegrown brands and position them to claim their place among the region's best and most appreciated beers.
"Carlsberg remains committed to working in good faith with the Government to accelerate its remaining divestment from Habeco and to achieve an outcome that is most beneficial for the Vietnamese people, especially the proud consumers of Hanoi beer," the Carlsberg representative concluded.
In 2017, beer consumption in Vietnam was estimated to be over 4 billion liters, up 260,000 liters (6%) over 2016, according to the Vietnam Beer Alcohol and Beverage Association (VBA).
This number is close to the target of 4.1 billion liters by 2020 set in the master plan for the development of the Vietnamese alcohol, beer, and beverages sector approved by MoIT, meaning each Vietnamese person will consume around 43 liters per year.
Sabeco, Vietnam's largest brewer with 40% of the beer market share, has produced 1.77 billion liters of beer alone, an increase of 6.6% year-on-year, while the second largest domestic brewer, Habeco (18% market share), brewed 657.6 million liters, down 6.5%.
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Read The Hanoi Times to stay up to date on developments in Vietnam.
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