In a growing trend of sophisticated transactions involving Vietnamese corporations, Freshfields and Baker & McKenzie have advised on TH Milk’s acquisition of a sugar refinery owned by UK-based food producer Tate & Lyle.
Under the purchase agreement signed in late April, TH Milk Joint Stock Company will acquire Tate & Lyle PLC’s share in Vietnamese sugar plant Nghe An Tate & Lyle for US$70m.
Hanoi-based partner Manh Hung Tran led the Baker & McKenzie team that advised TH Milk. Tran says that although the asset and the purchaser were located in Vietnam, the deal was unique in that it was structured as an offshore share acquisition. “As Vietnam does not have well-developed ‘round-trip’ investment rules, this presented a number of challenges working for a Vietnamese bidder,” he said.
Tate & Lyle were advised by a Freshfields team led by Hanoi-based partner Tony Foster. Foster said the conditions attached to the deal made it a challenging transaction. These conditions include approval from the Vietnamese government while the possible exercise of pre-emption rights by Mitr Phol Saturn Investments Limited – Tate & Lyle’s partner in the sugar plant – also added to the complexity of the deal.
Tran also said that the identity of the purchaser made this transaction a significant one and indicative of growing market trend towards local Vietnamese companies looking to complex acquisitions to further their domestic growth. “The purchase of a major foreign invested project such as Nghe An Tate & Lyle by a domestic investor who was originally uninvolved in the joint venture, rather than by a new foreign investor, represents a significant maturation of the domestic business scene. TH Milk were able to navigate and succeed in an international auction process for a major international quality asset…we are seeing domestic enterprises engaging in more and more sophisticated and high-value transactions on their own account, and also to begin to use international law firms more and more.”
Foster agrees that the deal is representative of a coming of age for the Vietnamese market, and adds that the sale of the sugar plant marks “the exit of an investment made in the first ‘waves’ of foreign investment in the early 1990s.”ALB
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