Issue 6

Thailand’s Central Group confirms $200m investment in Grab Thailand

Thailand’s retail conglomerate Central Group on Thursday officially announced it has acquired a significant non-controlling stake in Grab’s Thai entity for $200 million. 

As part of the strategic partnership, Central is investing in Grab’s local business and not at the holding company level. This investment is, therefore, not part of Grab’s ongoing Series H round, for which it is seeking to raise $5 billion. 

Of this, it secured $3 billion last year from investors including Toyota, Hyundai, Microsoft and others. Grab has previously received $50 million from Thailand’s KasikornBank at the entity level. 

“Our main objective for investing in Grab Thailand is to create the digital platform for Thai people. We would have invested in Grab holding company if we focused more on return on investment,” said Central Group’s president Yol Phokasub. 

As part of the agreement, both firms will collaborate on retail and services front. Central Group will help Grab accelerate its growth across multiple verticals including food delivery, parcel delivery and ride-hailing services while Grab will enable the retailer to grow its online traffic. 

Tos Chirathivate, executive chairman and CEO of Central Group, said, “Since our establishment 70 years ago, we have built and strengthened our offline platforms across the country so that our customers can access one of them in 30 minutes. 

But with the capacity of Grab, which is the regional tech company, we aim to build the online platform and make sure that our services can reach and serve our customers wherever they are in 30 minutes. It is important to build two-way services in this era. 

Grab set up operations in Thailand back in 2013 when it was known as MyTeksi. Over the past six years, it has aggressively expanded its operations and offered more services in Thailand from ride-hailing to food and parcel delivery, grocery delivery and digital payments. 

“By partnering with Central, which has the largest footprint of malls and hotels in Thailand, we will help their customers and merchants move from the offline world to online via our platform. We will grow our local services ever further, bringing more Thai-loved merchants and brands onto our Grab platform, and helping cement our position as Thailand’s Everyday Super App,” said Grab Group CEO and co-founder Anthony Tan. Prior to Grab, Central formed a joint venture firm with Chinese e-commerce giant to grow its e-commerce business to the regional level. 

Meanwhile, Grab now faces competition from Indonesia-based rival Go-Jek, which launched its operations including ride-hailing and food delivery in Bangkok last month. Grab currently offers services in Singapore, Malaysia, Indonesia, the Philippines, Malaysia, Thailand, Vietnam, Myanmar and Cambodia. It claims to have crossed 3 billion rides in January after hitting its 2 billion rides six months ago.


From – Deal Street Asia


Mitsui may commit $100m in private placement issue of Vietnam’s Minh Phu

Japanese conglomerate Mitsui has committed $100 million in Vietnam-based seafood processor Minh Phu’s upcoming private placement. 

Minh Phu confirmed one of the bidders for its private placement of 75.72 million shares was Mitsui. The company could not reveal four other investors from the US, Japan and South Korea because of confidentiality issues. 

Meanwhile, the Vietnamese government portal said the commitment from Mitsui was $100 million. The 75.72 million new shares translate into a value of $152.7 million based on Minh Phu’s current share price, representing 35 per cent of the company’s equity interest upon closing the transaction. 

Foreign investors currently own an aggregated 9.96 per cent stake in Minh Phu. The seafood firm is traded on the local UPCoM (unlisted public companies market). It said to move to the Ho Chi Minh City Stock Exchange (HOSE) after the private placement deal is finalised. HOSE is home to Vietnam’s biggest publicly traded companies including Vinamilk, Vingroup, Sabeco, Masan and Techcombank. 

Minh Phu specialises in shrimp exports, which reach $700 million annually. With the participation from Mitsui, it is expected to hit $1 billion. This is not the first time the Japanese keiretsu will be partnering with Minh Phu. In 2013, Mitsui acquired 31 per cent of Minh Phu Hau Giang, an affiliate of the Vietnamese seafood major.

From – Deal Street Asia

Indonesian carrier Garuda in talks with Go-Jek to provide logistics support

Indonesia’s national carrier Garuda and Go–Jek are in talks for a partnership that will make it easier for the ride-hailing and e-commerce app to move goods to customers within the 17,000 islands of the sprawling Southeast Asian archipelago. 

Garuda chief executive Ari Askhara told Reuters the talks are in an advanced stage and an agreement is expected to be finalised by the two companies in the next few months. Askhara said Garuda was developing a new technology relating to e-commerce and logistics. 

The partnership would enable goods ordered via Go–Jek‘s app in one city in Indonesia to be delivered in another using Garuda‘s fleet, he said. The CEO did not provide more details. Started in 2011 in Jakarta, Go–Jek has evolved from a ride-hailing service to a one-stop app through which its customers can make online payments and order everything from food, groceries to e-commerce goods. 

Go–Jek, which is valued at between $9 billion and $10 billion according to sources, declined to comment. E-commerce has been growing rapidly in Southeast Asia’s biggest economy, but one of the main obstacles is logistics as the islands are sprinkled across an area bigger than the European Union. Go–Jek recently raised over $1 billion in a funding round as it challenges Singapore-based rival Grab for a larger share of the region, sources told Reuters. 

The Go–Jek proposal is one of several being explored by Garuda to cut its dependence on passenger traffic as the airline tries to grow its profits after a bumpy 2018. The airline has been battling for market share against local market leader Lion Air, which in October suffered a crash of a Boeing Co 737 MAX jet, killing all 189 people on board.

From – Deal Street Asia

KP Capital-backed DexKo Global to acquire Australia’s Preston Chassis Industries

DexKo Global Inc, a global manufacturer of running gear components backed by US private equity firm KP Capital Partners, has agreed to acquire Australian maker of chassis, Preston Chassis Industries Pty Ltd (PCI), for an undisclosed amount, according to an announcement. 

The acquisition will be conducted though DexKo’s wholly-owned Australian subsidiary, AL-KO International Pty Ltd. Post acquisition, PCI will be integrated into DexKo Global. Adding PCI to our Australian business allows AL-KO to offer our collective customers a broad portfolio of products and systems to meet their quality and service requirements,” said Harald Hiller, global president and CEO, AL-KO Vehicle Technology. 

Fred Bentley, CEO, DexKo Global, said, the acquisition will support in delivering DexKo 2020 plan to grow its business, targeting highly engineered products and perform geographical growth. DexKo has been actively pursuing value-added acquisitions over the years. 

As part of its Australian operations, in mid 2018, DexKo acquired G&S Chassis and Hume Caravan and Camping Accessories, Australian family-owned businesses that manufacture chassis and its accessories. 

Previously, DexKo acquired Melbourne Trailer and Caravan Supplies, an existing distributor of DexKo and a supplier of products like caravan and trailer axles, leaf springs, among others. Also in strengthening its US presence in early 2018, one of DexKo’s subsidiaries, US-based Dexter acquired Kodiak a maker of light and medium duty axle brakes to bring into DexKo’s portfolio. 

A few months earlier, Dexter acquired US-based Henderson Wheel & Trailer Supply Inc, a manufacturer of sprung and torsion axles and fenders.

From – Deal Street Asia

China’s Starbucks challenger Luckin Coffee said to eye US IPO

Luckin Coffee, the ambitious Chinese startup rolling out thousands of stores to take on Starbucks Corp., is beginning preparations for a U.S. initial public offering that could raise around $300 million, people with knowledge of the matter said. 

The company is working with Credit Suisse Group AG on the deal, which could take place as soon as the second quarter, according to the people. Luckin could add more banks at a later stage, the people said, asking not to be identified because the information is private. 

Luckin is spending heavily to roll out 2,500 additional stores this year, after the company opened about 2,000 outlets in 2018, its first year of operation. It’s putting pressure on Starbucks, which has made China into its fastest-growing market and the second-biggest among the over 50 countries it operates in. 

The Chinese firm is hoping its focus on convenience and affordability will lure urban office workers who don’t need the big plush spaces offered by the U.S. giant. Luckin’s outlets are cashless and designed for fast pick-up as well as delivery. 

Starbucks, which opened its first store in China 20 years ago, only launched delivery in partnership with Alibaba Group Holding Ltd. in August. Luckin, most recently valued at $2.2 billion, has attracted funding from investors including Singapore sovereign wealth fund GIC Pte and China International Capital Corp. 

It has also inked a partnership with internet giant Tencent Holdings Ltd. Plans for the IPO are at an early stage, and details of the transaction could change, the people said. Representatives for Luckin and Credit Suisse declined to comment.

From – Deal Street Asia

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