Korean Group invests $470 million to become Masan’s largest foreign shareholder

Masan Group (Masan) announced that it has entered into agreements to form a strategic partnership with SK Group.

Masan plans to utilize SK’s investment of approximately $470 million to fund its future growth initiatives, as well as to strengthen its balance sheet. 

Masan Group and SK Group will pursue transformational business opportunities in Vietnam and to synergize existing businesses via M&A and strategic alliances.

“Vietnam is an important foundation for our South East Asia strategy. We believe the partnership model is crucial to win in this region and Masan is an ideal strategic partner for SK,” said Woncheol Park, Representative Director of SK South East Asia Investment.

“Their businesses are just starting to reflect true growth potential and we are backing Masan to grow their consumer wallet share by 5 times to $100 per consumer per annum,” he said.

Commenting on the partnership, Danny Le, Head of Strategy and Development for Masan Group said, “Masan and SK both believe in being champions in high-growth sectors of scale, developing global businesses and creating economic and social value for our respective countries. 

Their 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,” he said.

With a strong balance sheet, Masan will add up to $50 million of net earnings per annum for full year 2019, while Gross Debt to EBITDA (earnings before interest, taxes, depreciation and amortization) is expected to decrease to 2.5 times by year-end 2018.

Masan expects core net profit after tax to jump by at least 50 percent for financial year (FY) 2018 and forecast similar base case earnings growth momentum for FY2019 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.