South Korea SK Group to spend US$470 million on Masan shares

South Korea SK Group to spend US$470 million on Masan shares

The acquisition would make SK Group the largest foreign shareholder in Masan, which is now valued at about US$5 billion.

South Korea's third largest conglomerate SK Group on September 19 announced it has agreed to acquire a 9.5% stake of Masan Group - one of Vietnam's largest privately-run conglomerates, in a deal worth US$470 million, stated the latter in a statement.


According to the statement, the agreements will enable both parties to draw on each other's strengths to accelerate Masan's and SK's respective growth strategies. The corporate groups aim to jointly pursue transformational business opportunities in Vietnam and to synergize existing business units.


The acquisition would make SK Group the largest foreign shareholder in Masan, which is now valued at about US$5 billion.


Woncheol Park, representative director of Southeast Asia Investment for SK Group, stated that Vietnam is an "important foundation" for the group's Southeast Asia strategy.  


"We will actively work together to identify strategic opportunities to expand into attractive categories in Vietnam where SK can add significant value through our know-how and technology. We believe this is the first of many investments with Masan," said Park in the statement.


Danny Le, head of strategy and development for Masan Group, said SK Group's invaluable experience, know-how, technology, business platforms and global network will provide Masan a new dimension to deliver high-double digit growth for years to come.

With a strong balance sheet, Masan will add up to US$50 million of net earnings per annum for full year 2019. Management expected core net profit after tax to jump by at least 50% for the fiscal year of 2018 and forecast similar base case earnings growth momentum for 2019 as each of its core business continues to deliver on its growth plans.


Masan plans to consolidate cash at the group level by up-streaming free cash flows from its subsidiaries to build a strategic investment war chest and/or return capital to shareholders. The company does not intend to issue additional shares to investors over the next three years.


SK Group is one of the largest corporate groups in South Korea, with businesses across energy, chemicals, telecommunications, semiconductors, logistics and service sectors. SK Group operates globally across over 40 countries and had a combined revenue of US$141 billion as of year-end 2017.

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