Leading Vietnamese food and cooking oil producer Kido Group completed the purchase of a 25% stake in Tho Phat Food Processing Company on Monday, and is negotiating to buy more to be the majority shareholder.
Previously, Kido's board of directors had approved plans to buy a 25% stake in Tho Phat and later raise the ownership to 51-70%.
The M&A deal is part of Kido’s strategy for further development in leading Vietnam’s essential food sector and global expansion, said Kido vice chairman and CEO Tran Le Nguyen, adding that the transaction followed a long period of negotiations.
Following the acquisition, the combined revenue and profit from Tho Phat and Kido's bakery segment are expected to reach VND2 trillion ($85.35 million) and VND200 billion ($8.54 million) this year, according to Nguyen.
Ho Chi Minh City-based Tho Phat is a leader in making and supplying dumplings, with more than 4,000 sales points via different distribution channels nationwide.
Kido holds a 44.5% market share for ice cream in Vietnam, including 24.2% in Merino, and 19.2% in the Celano brand, according to Euromonitor - the world's leading provider of strategic market research.
The food major also dominates Vietnam’s margarine segment with a 74.9% market share, and ranks second in the cooking oil segment with a 30% market share.
Kido returned to the bakery market with Kido’s Bakery in 2021. The group aims to develop Kido’s Bakery into the second-largest brand in Vietnam in the next three to five years.
Kido has advantages in brand development, logistics, and a large distribution network with 45,000 dried food and 120,000 frozen food outlets across Vietnam.