South Korea SK Group acquires $1 bln stake in Vingroup

South Korean conglomerate SK Group has spent $1 billion to acquire stake in Vietnam’s largest private conglomerate Vingroup.  

By purchasing 205.7 million shares at the price of VND113,000 ($4.85) each, SK has secured a 6.15 percent stake in the Vietnamese company.

Vingroup in March sought its shareholders’ vote on a plan to raise at least VND25 trillion ($1.08 billion) through a private placement to foreign investors.

It planned to use VND10 trillion ($432.3 million) of the proceeds to restructure its debts, VND6 trillion ($259.4 million) to invest in its auto company VinFast, technology firm VinTech and smartphone maker Vinsmart.

Vingroup is Vietnam’s largest listed company by market capitalization and is worth VND368 trillion ($15.8 billlion).

SK is among the largest conglomerates in South Korea with businesses in telecommunications, technology, electronics, logistics and service.

Last year, it had a revenue of $132 billion, with total asset worth $184 billion. 

In September, SK Group acquired a 9.5 percent stake in Vietnam’s diversified business Masan Group for $470 million.

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SK Group announces $30mln investment for Vietnam’s innovation centre

SK Group Chairman Chey Tae-won reached the agreement while making a three-day visit to Vietnam last week.

NIC, planned to be developed in an industrial park in Hanoi, will host some 40 big technology companies and 150 startups, plus 15 venture investment funds. Its construction is expected to be completed by 2020.

Last month, the SK Group said it planned to purchase a 6.1 percent stake of Vietnam’s real estate-retail-tech giant Vingroup at the price of 1 billion USD. In 2018, the group spent some 470 million USD acquiring 110 million shares in Masan Group, the second largest private firm in Vietnam.

In August 2018, its five affiliates, including SK Holdings Co. and SK Innovation Co., established a joint venture named SK South East Asia Investment Pte. Ltd. in Vietnam to launch promising business opportunities in the burgeoning Southeast Asian market.

Chey said that his group will continue practical investment to create practical value for the Vietnamese people.

The Korean group operates in the fields of energy, telecommunications, high-tech components, logistics and services. It has been present in more than 40 countries and territories.

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Masan Group and SK Group complete strategic partnership deal

Masan Group signed a strategic partnership agreement with SK Group on September 19. The agreement will enable the two parties to draw on each other’s strengths to accelerate Masan’s and SK’s respective growth strategies. The corporate groups aim to jointly pursue transformational business opportunities in Vietnam and to synergise existing business units.

SK Group is one of the largest corporate groups in South Korea, with business across energy, chemicals, telecommunications, semiconductors, logistics, and services. SK Group operates globally across more than 40 countries and had a combined revenue of $141 billion as of the end of 2017.

SK’s investment of approximately $470 million will entirely comprise of new capital and SK will own 9.5 per cent of Masan Group. The company plans to utilise the proceeds to fund its future growth initiatives, as well as to strengthen its balance sheet.

With a strong balance sheet, Masan will add up to $50 million of net earnings per annum for the full year of 2019, while gross debt to EBITDA is expected to decrease to 2.5x by the end of 2018. Management expects core net after-tax profit to jump by at least 50 per cent in the fiscal year of 2018 and forecast similar base case earnings growth momentum for the 2019 fiscal year 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. MSN does not intend to issue additional shares to investors over the next three years.