What Happened After Sabeco Successfully Purchased Nearly 38 Million Sabibeco Shares?

Vietnam’s leading beer, alcohol, and beverage company, Sabeco, has recently announced its intention to acquire over 37.8 million shares of Sabibeco Group, equivalent to a 43.2% stake in the company.

As a major shareholder in Sabibeco, Sabeco currently holds nearly 14.4 million shares, representing a 16.4% stake in the company. By successfully acquiring the proposed additional shares, Sabeco will increase its ownership in Sabibeco to nearly 52.2 million shares, or 59.6% of the charter capital, thus becoming Sabibeco’s parent company.

At a proposed purchase price of 22,000 VND per share, Sabeco is expected to spend more than 830 billion VND on this transaction.

The purpose of this acquisition is to increase Sabeco’s ownership in Sabibeco and thereby expand its production and business operations.

According to a report by FPTS Research, Sabeco is the second-largest beer producer in Vietnam, with a current designed capacity of 2.4 billion liters per year, meeting approximately 57% of the country’s beer demand.

With 26 breweries across the country, FPTS estimates that the total efficiency of Sabeco’s breweries is close to 60%. Despite having the second-largest production scale in Vietnam, with 2.4 billion liters per year, Sabeco’s 26 breweries produce less than Heineken’s 6 breweries, which have a capacity of 2.78 billion liters per year. 

Sabeco’s annual report reveals that its 26 breweries include those that produce Saigon beer under contract, such as Saigon Beer – Binh Duong, Saigon Beer – Hoang Quynh, and Saigon Beer – Phu Ly, as well as breweries owned by other companies in which Sabeco has no controlling stake, including breweries in Kien Giang, Vinh Long, Ben Tre, and Bac Lieu.

By acquiring Sabibeco’s shares, Sabeco will gain control over these breweries currently operated by Sabibeco.

Sabibeco, formerly known as Saigon Beer Binh Tay Joint Stock Company, was established on November 25, 2005, with its first project being the Saigon Beer – Binh Duong Brewery. The company’s initial chartered capital was 90 billion VND, and after six capital increases, it has reached 875 billion VND.

Sabibeco’s primary business activity is the production and trading of beer products. Specifically, the company contract manufactures various Saigon beer brands for Sabeco, including Saigon Lager, Saigon Export, Saigon Special, and Saigon 333Export.

Sabibeco is the largest contract manufacturer of Saigon beer in which Sabeco does not hold a controlling stake. In 2023, revenue from sales to Sabeco amounted to 1,645 billion VND, accounting for 81% of Sabibeco’s total revenue.

In terms of financial performance, Sabibeco recorded a consolidated net revenue of 547 billion VND in the first quarter of 2024, a 48% increase compared to the same period last year, while incurring a consolidated after-tax loss of nearly 17 billion VND. Prior to this, Sabibeco had reported losses for four consecutive years from 2020 to 2023.