Vietnamese business giant Vingroup has agreed to merge its retail and agriculture unit with Masan Consumer Holdings, aiming to form Vietnam’s biggest retailer.
The deal has the effect of spinning off Vingroup’s retail assets into a new company in which it will hold a minority stake, freeing Vietnam’s largest privately-owned to focus on its industrial businesses, including car manufacturing, smartphones and a new flatscreen television brand it is launching.
Under the agreement, Vingroup will convert shares in VinCommerce JSC (retail) and VinEco (agriculture) into shares of the post-merger company in which Masan Group will take control while Vingroup will be a minority shareholder.
The new company will take over VinCommerce’s retail network including 2600 VinMart and VinMart+ outlets across the country together with 14 high-tech farms of VinEco.
The new venture will merge the country’s largest retail group with its leading FMCG player, creating a farm- or factory-to-store business entity.
Vice-chairman and general director of VinGroup, Viet Quang Nguyen, said the main reason for the merger is that the group has changed its development strategy to focus on the technology industry, especially its new VinFast car company and VinSmart phone business.
“Vingroup has completed its mission to create the pioneering and most effective clean agriculture and retail system in Vietnam,” says Cong Thang Truong, chairman of Masan Consumer. “And now we will carry this flag to continue our mission to serve consumers while ensuring a fair retail market for Vietnamese manufacturers.”
VinCommerce has strengthened its retail presence by a combination of organic growth and by acquiring rival retail groups including 23 Fivimart supermarkets, 87 Shop&Go convenience stores, and the smaller Queensland convenience-store chain.
Masan Consumer is one of Vietnam’s largest FMCG companies, manufacturing and distributing food-and-beverage products, including sauces, instant noodles and bottled beverages.