Government seeks windfall from sale of brewer Sabeco
The long-delayed sale of a stake in Sabeco, the country’s biggest brewer, has finally been set for 18 December 2017. The government hopes it will rake in at least USD five billion.
It’s widely assumed that many foreign firms – from Japan’s Asahi to Belgium’s AB-InBev – have shown an interest in Sabeco, or Saigon Beer Alcohol Beverage Corp., since it was earmarked for privatisation. Heineken currently holds a five percent stake in the Vietnamese firm.
But the foreigners’ eagerness was served a low blow when Sabeco’s share price went through the roof (it has tripled since its December 2016 listing) and the government put a cap on foreign ownership, limiting it to 49 percent.
At present, Sabeco’s shares are trading at a price-to-earnings multiple of 49 compared with 20 for Asahi, 17 for Thai Beverage and 15 for Japan’s Kirin Holdings. If there will be a bidding war for the shares, the winner may have to fork out a sum in excess of 50 times Sabeco’s earnings. The high multiple would be a big bet on uninterrupted growth.
The Sabeco sale could provide a blueprint for other privatisations that Hanoi is considering as part of broader economic reforms, including that of brewer Habeco, in which Danish brewer Carlsberg owns 17.3 percent.
Before the sale, Sabeco conducted roadshows and private meetings in both London and Singapore, which, it was reported, were attended by a total of 85 investors, including representatives from AB-InBev, Asahi and Kirin.
Sabeco is planning to launch one or two products and drive up its market share to 42-43 percent next year, from about 41 percent now.
Vietnam is one of Asia’s most attractive beer markets. Per capita beer consumption is estimated to rise to 48 litres by 2021 from 41 litres this year.
