(New versions, offers, company information, comments from sources)
By Phuong Nguyen, Anshuman Daga and Kane Wu
HANOI, May 18 (Reuters). Alibaba Group Holding Ltd is completing a $ 400 million financing in the retail unit of the Vietnamese conglomerate Masan Group Corp, marking its first investment in one of the fastest growing economies in Asia.
A consortium of Alibaba and Baring Private Equity Asia is acquiring a 5.5% stake in The CrownX to also strengthen Lazada, Alibaba’s Southeast Asian e-commerce platform, Masan said in a statement on Tuesday.
CrownX, Vietnam’s largest retail company, was founded in 2019 through the merger of Vingroup’s retail units and high-tech farms with Masan’s food and beverage unit.
The company said it had a valuation of $ 6.9 billion, or $ 93.50 per share, prior to investing.
Parent company Masan will hold 80.2% of the retail unit.
“The combination of Alibaba’s online retail expertise, Lazada’s e-commerce platform in Vietnam and Masan’s leading offline network will be a powerful catalyst in modernizing the Vietnamese retail landscape,” said Kenny Ho, Southeast Asia investment director for Alibaba Group.
As part of the transaction, VinCommerce, with its 130+ supermarkets and 2,900 mini-marts, will be the preferred grocery retailer on Lazada’s platform in Vietnam and its physical stores will become pick-up points for online orders.
Groceries make up 50% of Vietnam’s retail market and 25% of consumer spending, but online penetration is still low, Masan said.
Lazada competes with the Singapore-based Internet platform Sea’s Shopee, which is gaining ground across Southeast Asia.
According to Refinitiv data, Alibaba’s investment is the largest in the region since Indonesian e-commerce leader Tokopedia’s $ 1.1 billion in funding in December 2019.
Sources familiar with the matter said Alibaba is providing most of the funding for the latest deal, which began in early 2020.
The story goes on
Chinese web retailer JD.Com and financial sponsors also showed interest in investing in The CrownX.
Masan also said Tuesday that there was an additional investment of between $ 300 million and $ 400 million in The CrownX in advanced talks with other investors and expects to close later this year.
According to the sources, regional retailers and financial investors are likely to appear as potential buyers in the next round of investments.
Credit Suisse advised Masan on the transaction and Deutsche Bank advised Baring Private Equity Asia. (Reporting by Phuong Nguyen in Hanoi, Anshuman Daga in Singapore and Kane Wu in Hong Kong; editing by Christopher Cushing, Ed Davies, Martin Petty)