Yahoo Finance UPDATE 2-China's CDH buys minority interest in Vietnam grocery chain Bach Hoa Xanh
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Mobile World will remain the controlling shareholder
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Shares of Mobile World up 5% on Tuesday
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Vietnam is one of CDH Southeast Asia's priority markets
(Adds deal adviser in paragraph 9, updates shares in paragraph 11, adds comments from Mobile World statement in paragraphs 12-13)
By Yantoultra Ngui and Phuong Nguyen
SINGAPORE/HANOI, April 9 (Reuters) - China's CDH Investments said on Tuesday it completed an investment for a minority interest in grocery chain Bach Hoa Xanh, a unit of Vietnam's biggest retail group by market value, Mobile World .
The deal's value is 1.8 trillion dong ($72.17 million), showed a letter to CDH from the Ho Chi Minh City investment department seen by Reuters.
Mobile World, parent company of Bach Hoa Xanh, said in a separate statement on Tuesday that the shares sold accounted for 5% of Bach Hoa Xanh's total shares.
Both CDH and Mobile World did not comment on the valuation of the deal.
The announcement confirms a Reuters report in February saying that CDH, one of China's biggest alternative investment firms and also a former Mobile World investor, was in advanced talks to buy a minority stake in Bach Hoa Xanh.
Beijing-based CDH did not disclose financial details of the investment but said Mobile World will remain the controlling shareholder of Bach Hoa Xanh, next to CDH and the company's management.
"Vietnam is one of CDH Southeast Asia's priority markets," said Thomas Lanyi, head of Southeast Asia for CDH.
"Consumer needs are evolving in favor of modern alternatives to traditional wet markets and Bach Hoa Xanh is ideally positioned to capture this potential," he said in a statement.
JP Morgan acted as financial advisor to Bach Hoa Xanh on the deal.
Bach Hoa Xanh, which specialises in selling fresh food and vegetables, commands a network of around 1,700 stores across southern and south‐central Vietnam, the companies said.
Shares in its parent Mobile World, co-founded and led by Vietnamese businessman Nguyen Duc Tai, were up 6%, giving it a market value of around $3 billion, LSEG data showed.
Mobile World said in its separate statement that it didn't need to sell as much as 20% of Bach Hoa Xanh as initially planned, with the grocer's positive earnings results and cashflow turning profitable from 2024.
Mobile World added that the proceeds from the deal will be used to fund general business operations and the grocery chain's development plan.
CDH, co-founded by Chairman Wu Shangzhi in 2002 as one of China's earliest private equity firms, is best known for its dealmaking in traditional industries such as consumption and manufacturing.
It has over $27 billion in assets under management and has been an investor in pork supplier WH Group and appliance maker Midea Group, its website showed. ($1 = 24,940.0000 dong) (Reporting by Yantoultra Ngui in Singapore and Phuong Nguyen in Hanoi; Editing by Muralikumar Anantharaman and Sonali Paul)
