Vietnam: Sabeco planning acquisition of additional stake in local brewer Sabibeco Group

Ho Chi Minh City-based Sabeco, controlled by Thai Beverage, plans to acquire an additional 37.8 million shares, or a 43.2% stake, in local brewer Sabibeco Group (SBB) this year, making it a subsidiary, TheInvestor reported on September 11.

With the SBB shares priced at VND22,000 ($0.89) apiece, Sabeco expects to spend over VND831 billion ($33.68 million) on the acquisition, the firm said last week.

Sabeco currently holds 14.4 million SBB shares, or 16.4%, while its affiliated persons own an additional 5.5 million shares, or 6.3%. Once the deal is completed, the stake of Sabeco and its affiliated people in SBB will increase to 65.9%.

The acquisition of SBB, known for its Sagota brand products, will not only help Sabeco expand its production capacity but also solidify its position as the largest brewer in Vietnam by output.

According to a report by FPT Securities, as of end-2023, Sabeco operated 26 plants in Vietnam with a total designed capacity of 2.4 billion liters per year. With the addition of six Sabibeco factories that produce a combined total of 610 million liters annually, Sabeco’s total annual capacity will rise to 3.01 billion liters.

Currently, Sabeco’s main competitors in the Vietnam market, Heineken Vietnam, Habeco, Carlsberg and Sapporo, have respective annual capacities of 2.78 billion liters, 800 million liters, 360 million liters, and 150 million liters, according to the broker.

Sabeco has launched a new beer brand called 333 Pilsner, which is expected to increase its advertising and promotion (A&P) costs in the second half of 2024 as it seeks to build a customer base for the product.

Vietcap Securities has estimated Sabeco’s ratio between A&P costs and revenue at 10.4% in the second half of this year, higher than 7.7% in H1. In H1/2024, Sabeco spent VND1.03 trillion ($41.76 million) on A&P, down 16% year-on-year.

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