China's CDH in talks to buy minority stake in $1.7 bln Vietnam grocery chain, say sources

WH

28/02/2024 03:50

By Phuong Nguyen and Yantoultra Ngui
       HANOI/SINGAPORE, Feb 28 (Reuters) - China's CDH
Investments is in advanced talks to buy a minority stake in Bach
Hoa Xanh (BHX) from Vietnam retailer Mobile World  MWG.HM  in a
deal that could value the grocery chain at up to $1.7 billion,
two sources with direct knowledge said.     
    CDH, one of China's biggest alternative investment firms and
also a former Mobile World investor, has emerged as the
frontrunner to buy a stake of up to 10% after outbidding rivals,
the sources said.
    "CDH is looking to buy between 5% to 10% stake," one of the
sources said, adding that deliberations were ongoing and there
was no certainty that a deal will be sealed. 
    The second source said a deal "could be struck as early as
next month if negotiations were successful".
    Both sources declined to be named as the matter was private.
    CDH and Mobile World, Vietnam's biggest retail group by
market value, declined to comment when contacted by Reuters.
    A deal by Beijing-based CDH would underscore global
investors' interest in Vietnam's fast-growing business sectors
including consumer, despite the country's property sector woes
triggered by a crackdown on corruption.        
    BHX's parent company, Mobile World, first announced its plan
of a minority stake sale in the grocer in 2022 but then put it
on hold due to unfavorable market conditions. 
    The sale process was restarted last year and had attracted
interest from Singapore sovereign wealth fund GIC  GIC.UL  and
companies from Thailand, Reuters reported at the time. 
    CDH, co-founded by Chairman Wu Shangzhi in 2002 as one of
China's earliest private equity firms, is best known for its
dealmaking in traditional industries such as consumption and
manufacturing in the early years.    
    It now has over $27 billion in assets under management and
has been a major investor in the world's largest pork supplier,
WH Group  0288.HK , and leading appliance maker, Midea Group
 000333.SZ , according to its website.
    CDH had exited its Mobile World investment nearly 10 years
ago to capitalise on its gains, one of the sources said.
    BHX, which was founded in 2015, was running more than 1,700
stores in Vietnam's southern and south-central provinces and was
expected to be profitable from this year, its managing director
told investors last year.

 (Reporting by Phuong Nguyen in Hanoi and Yantoultra Ngui in
Singapore; Editing by Sumeet Chatterjee and Muralikumar
Anantharaman)
 ((Yantoultra.Ngui@thomsonreuters.com;))