Thai billionaire seeks to increase stake in Vietnam dairy gaint Vinamilk

F&N Dairy Investments Pte. Ltd - an entity associated with Thai billionaire Charoen Sirivadhanabhakdi - has registered to purchase nearly 20.9 million shares of Vietnamese dairy giant Vinamilk (HoSE: VNM).

The transaction, with an estimated value of VND1.3 trillion ($51.2 million), is expected to be done from January 17 to February 14 via throughput and order matching methods.

The Thai firm continues to seek to accumulate VNM shares after failing to acquire any in the last purchase registration at the end of last year due to unfavorable market conditions.

Despite failure, this move partly demonstrated the Thai billionaire’s determination to increase his stake in Vinamilk.

The presence of Charoen Sirivadhanabhakdi in Vinamilk became noticeable after Singaporean entity TCC Holding acquired Fraser & Neave in 2013 for $11.2 billion. At that time, F&N Dairy Investment, a subsidiary of Fraser & Neave, was already a major shareholder in Vinamilk.

Members of Fraser & Neave had been invested in Vinamilk for a long time but gained more attention after the State Capital and Investment Corporation’s (SCIC) divestment in 2017.

After several increases in ownership, this group now holds a total of over 20% of Vinamilk’s shares, second only to the state-owned shareholder (36%). It is estimated that the Thai group’s stake in Vinamilk is worth around $1 billion.

Clearly, Vinamilk is the biggest target for Charoen Sirivadhanabhakdi in Vietnam, following his high-profile acquisition of brewer Sabeco (HoSE: SAB). At the end of 2017, Vietnam Beverage - part of Thaibev, the Thai billionaire's company, spent nearly $5 billion to purchase 343.66 million SAB shares, officially gaining control of Vietnam’s largest beer company.

Despite currently being at a loss of about $3.5 billion for this investment, the Thai billionaire continues to show long-term vision, with ambitions to dominate the Vietnamese beer market as a stepping stone to the Southeast Asian region.

Therefore, the loss is not a major concern for Thaibev. In return, Sabeco pays annual cash dividends worth trillions of VND (VND1 trillion = $39.4 million), most of which flows into the pockets of the Thai giant. After more than eight years of acquisition, Thaibev has earned over VND12 trillion ($472.72 million) in dividends from Sabeco.

Similarly, although it does not control Vinamilk, F&N still receives significant dividends from the dairy giant, as it regularly pays high dividends of around 40-60% annually. Since first indirectly acquiring shares in Vinamilk in 2013, the Thai billionaire has pocketed nearly VND15 trillion ($590.9 million) in dividends.

In December 2024, Vinamilk said it plans to spend VND1.045 trillion ($41.3 million) to pay interim cash dividends to shareholders for the second phase of 2024 at a rate of 5%, according to the company.

Earlier, on October 24, Vinamilk had spent VND5.1 trillion ($200.75 million) to pay the remaining dividends for 2023 at a rate of 9.5% and interim dividends for the first phase of 2024 at 15%.

The dairy giant boasts a tradition of paying high cash dividends. At its peak in 2016-2017, the payout ratio reached up to 50-60% of the share face value. In 2023, the company posted a dividend rate of 38.5%, equivalent to about VND8.04 trillion ($316.5 million).

On the Ho Chi Minh Stock Exchange (HoSE), VNM closed Wednesday at VND61,700 ($2.43) per share.