Businesses with extra cash: what to do with all of it?
VietNamNet Bridge - After concluding successful transactions, large conglomerates now have trillions of dong in their coffers. And they have to think about how to use the money.


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FPT Group of Truong Gia Binh, one of the richest stock billionaires, has wrapped up the sale of a 47 percent stake in FPT Trading, a subsidiary of FPT, to Synnex Technology International Corporation.

FPT earned nearly VND1 trillion from selling a part of its retail company to a leading global technology, telecommunication and electronics distribution group.

Sinnex is known as the world’s third largest conglomerate in the field with revenue of tens of billions of dollars, while FPT Trading is the largest ICT product distributor in Vietnam with 40 percent of market share.

Prior to that, FPT also sold a 30 percent stake in FPT Retail to Dragon Capital and VinaCapital and earned nearly VND1 trillion. FPT share prices increased sharply after FPT got big money.

In 2014, Kinh Do Group (KDC) sold its sweets manufacturing facility to the US-based Mondelez International in a deal worth $370 million.

After concluding successful transactions, large conglomerates now have trillions of dong in their coffers. And they have to think about how to use the money.
This was one of the most noteworthy affairs at that time in which Tran Le Nguyen and Tran Kim Thanh, the owners of Kinh Do, collected VND8 trillion after 20 years of operation. The amount of money, plus the money Kinh Do got before, turned Kinh Do into a ‘cash king’.

In April, A My Gia JSC, a cosmetics trading company, sold a 100 percent stake to Japanese Earth Chemical at VND1.8 trillion.

Many other Vietnamese businesses also earned big money from large M&A deals, including Diana (sanitary pads), X-Men (shampoo), and Prime (enameled tile). In Prime’s case, sources said the seller pocketed VND5 trillion. 

Most recently, sources said the owners of a cement company in the central region sold a stake to Thai SCG and earned $156 million.

Binh of FPT said FPT plans to divest from the trading sector to gather strength in its core business field – IT technology.

However, investors still do not know which technologies FPT will focus on, because software outsourcing, the field FPT has been developing over many years, does not need much capital. 

While the world’s technology conglomerates have gained success, FPT still cannot make big leaps. Ten years ago, FPT entered the bourse with capitalization value of $1.5 billion, and the figure now is around $1.1 billion.

In recent years, many Vietnamese giants have sold their businesses for trillions of dong. However, in many cases, the money was divided among shareholders because they could not find new investment opportunities.


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H. Tu

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