Fraser and Neave (F&N) to Acquire Up to 4.6% Additional Stake in Vinamilk for S\$295 Million

Key Details of the Acquisition

• Transaction Overview: Fraser and Neave, Limited (F&N) announced that its wholly-owned subsidiary, F&N Dairy Investments Pte Ltd (FNDI), has entered into a conditional share purchase agreement (SPA) to acquire up to 96,094,631 shares, or approximately 4.6% of the issued share capital of Vietnam Dairy Products Joint Stock Company (“Vinamilk”) from Platinum Victory Pte. Ltd., a wholly-owned subsidiary of Jardine Cycle & Carriage Limited.
• Current Stake: F&N, through FNDI and F&NBev Manufacturing Pte. Ltd. (F&NBev), currently holds approximately 20.39% of Vinamilk.
• Post-Acquisition Stake: Following completion, F&N will hold a total of 522,279,866 shares in Vinamilk, representing approximately 24.99% of the issued share capital—just below the 25% mandatory public tender threshold in Vietnam.
• Transaction Value: The purchase price is VND62,555 per share (approx. S\$3.07), totalling VND6,011,200 million (approx. S\$295 million).
• Funding: The acquisition will be funded through a mix of internal resources and external borrowings.
• Completion Timeline: The deal is expected to close within 35 days of announcement (16 December 2025), subject to customary conditions and regulatory requirements on the Ho Chi Minh Stock Exchange.

Strategic Rationale for the Acquisition

• Strengthening Strategic Position: F&N expects that increasing its stake in Vinamilk will further solidify its strategic partnership and deepen its exposure to Vietnam’s rapidly growing dairy market.
• Quality Business and Leadership: F&N cited Vinamilk’s experienced leadership, robust product lines, modern production facilities, and strong cash flow generation as key drivers for long-term value creation and growth.
• Vinamilk’s Market Position: Vinamilk is a leading Vietnamese dairy producer with diversified products, including traditional dairy, plant-based alternatives, and beverages such as fruit juices and tea.

Financial Impact and Key Metrics

• Consideration & Market Value: The aggregate consideration of S\$295 million is based on arm’s length negotiation, considering F&N’s existing stake, Vinamilk’s historical and current performance, and market analysis. The open market value of the Sale Shares is S\$291 million (based on VND61,740 per share as of 15 December 2025).
• Asset Book Value: As at 30 September 2025, the book value of the Sale Shares is S\$85 million; net tangible asset value is S\$72 million.
• Net Profit Contribution: For the 9 months ended 30 September 2025, Vinamilk’s net profit attributable to the Sale Shares is approximately S\$19 million.
• Chapter 10 SGX-ST Compliance: The transaction constitutes a “disclosable transaction” (relative figure at 13.6%) under Rule 1006 of the SGX-ST Listing Manual.
• Pro Forma Financial Effects:
  • Earnings: If the deal had completed at the start of F&N’s FY2025, pro forma profit after tax rises from S\$150 million to S\$164 million, and EPS increases from S\$0.103 to S\$0.113.
  • Net Tangible Assets: NTA per share remains unchanged at S\$1.76, with total NTA marginally decreasing from S\$2,559 million to S\$2,558 million, reflecting the acquisition’s funding structure.

Important Considerations for Shareholders

• Price Sensitivity: This acquisition is significant and may positively impact F&N’s earnings and strategic positioning in a fast-growing market. However, the company remains below the 25% public tender threshold in Vietnam, meaning no obligation for a public offer arises.
• Funding Structure: The use of both internal resources and external borrowings, and the modest impact on NTA, are important considerations for shareholders monitoring capital structure and leverage.
• No Change in Board or Management: No new directors are being appointed in connection with the transaction.
• No Further Immediate Purchases Planned: F&N currently has no intention to acquire additional shares in Vinamilk that would trigger a public tender offer.
• Inspection of SPA: The SPA is available for inspection for three months at F&N’s registered office in Singapore.
• No Director/Substantial Shareholder Interests: None of F&N’s directors or substantial shareholders have any direct or indirect interest in this transaction.

Potential Share Price Impact

The acquisition is material and price sensitive, as it:

• Strengthens F&N’s strategic position in Vietnam’s growing dairy market.
• Is expected to boost earnings and provide potential long-term value creation.
• Represents a sizable investment (S\$295 million) and signals F&N’s commitment to expanding its regional footprint.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should perform their own due diligence and consult with their financial advisors before making any investment decisions. The information herein is derived from company disclosures and may be subject to change.

View F & N Historical chart here