Mondelēz to acquire Vietnamese biscuit leader Kinh Do for $370m
Kinh Do Corporation produces Kinh Do mooncakes and biscuits, Cosy biscuits, Solite soft cakes and AFC crackers.
The firm commanded a leading 37% value share in the Vietnamese biscuit market in 2013, according to Euromonitor International.
Mondelēz will acquire 80% of the business for VND 7.846 trillion ($370m), subject to approval from Kinh Do shareholders.
Strong routes to market
"Kinh Do is a successful Vietnamese business with decades of heritage. Its deep understanding of local consumers, the commercial environment and complex routes to market in Vietnam, provide a strong foundation to grow the business,” said Tim Cofer, executive vice president and president, Asia-Pacific and Eastern Europe, Middle East & Africa for Mondelez International.
Asia-Pacific was Mondelēz’s fastest growing region by reported revenue in its third quarter results last week. The firm reported a 1.5% net revenue gain in Asia-Pacific, which along with Latin America was the only region to register growth.
Euromonitor on Kinh Do
Euromonitor said in the executive summary of its ‘Biscuits in Vietnam’ report that Kinh Do had a wider and more efficient distribution network compared to its rivals and had been more active in marketing.
“The company especially cooperated with leading retailers, such as supermarkets/hypermarkets in the country to run discount programmes, which were considered to be the most effective way of boosting short-term sales in Vietnam,” said the report.
Shareholders need to approve
Kinh Do Corporation's Board of Directors will propose the transaction to shareholders at an Extraordinary General Meeting in December 2014. The company will go ahead with plans to consolidate its snack division – excluding Kido ice cream retail bakeries and dairy division – into one business unit
The deal with Mondelēz is expected to close in the second quarter of 2015. Mondelēz has an option to buy the remaining shares in Kinh Do.