Bibica’s M&A

PAN Group announced to have bought a 39.9% stake in Bibica for $22.6 million to increase its ownership of the confectionary company to 98.3%. These stakes come from 17 investors at the price of 71,000 VND/unit. After the transaction, this company owns 18,435 million shares of Bibica, corresponding to 7.7 voting shares. PAN Group has used its own capital and other legal capital sources of the company to complete this deal of more than 524 billion VND. In March 2022, this company announced that it wanted to buy all 41.06% of the remaining shares of Bibica to own the entire confectionery brand. In the middle of 2019, this PAN Group also made a public offer to buy at the price of 68,500 VND/share to increase its ownership to absolute but failed.

 

Brand logo of Bibica after the M&A

 

PAN Group started owning this confectionery business with a history of nearly 30 years from the beginning of 2015. South Korean conglomerate Lotte also showed interest in Bibica, in which it owned a 44.03 percent stake, but sold out in 2020 after years of competing with PAN. After gradually owning Bibica, PAN Group considers confectionery as one of the main business lines in the food industry. The leaders of of this company considered Bibica as a key part in its food business and important to its feed-farm-food strategy. With a centralised structure, Bibica will “more easily unify policy directions, development orientation and project investment approval”.

 

How PAN Group assessed the domestic confectionery market

Last year, the domestic confectionery market grew poorly when affected by COVID-19, affecting people’s consumption demand. The PAN Group said that strict distancing regulations led to the closure of most of the brick-and-mortar stores, which accounted for a major proportion of the sales channel structure. This made it difficult to reach buyers, affects jobs and consumers’ incomes, and indirectly reduced the need to spend on shopping and giving gifts during Tet.

 

Bibica’s product catalog

 

In the first quarter of 2022, Bibica’s revenue decreased by 10% but other profits increased sharply by more than 130 billion VND. The above figure was 17 times higher than the same period and 30% higher than the whole year plan. This was Bibica’s record high profit since listing. In 2022, PAN Group has forecast a bright outlook for the confectionery industry this year thanks to recovering demand.

Sources of information are TheSaigonTimes and VNEconomy.