Kinh Do development history is closely tied with strategic merger, joint venture and partnership.

Early in 2012, with a 14 million shares issuance (equivalent to 10 % of total chartered capital) for the strategic partner Ezaki Glico (Japan), Kinh Do successfully completed its most recent M & A deal. Having many years of experience in the Merger & Acquisition field, Professor Nigel Denscombe, Chairman and CEO of Denscombe Corporation in Tokyo and New York, said that Kinh Do is one of the paragon representative of the success or failure of businesses conducting M & A in Vietnam.

From a small snack factory that was established in 1993 with a chartered capital of VND 14 billion and approximately 70 employees, Kinh Do grew significantly through many M&A deals together with developing its manufacturing capacity to have current operations of 4 plants, 5 major food companies, and over 8,000 employees. The conglomerate also owned other companies that operate in the other part of food industry including confectionery, soft drink, ice cream ... For 2013, Kinh Do sets its target revenue at 5,200 billion while aiming to have VND 600 billion profit before tax.

July of 2003, Kinh Do made its first mark in the M & A strategy with the acquisition of the ice cream factory of Unilever owning brand Wall, the brand accounted for more than 50 % of the single serve ice cream market share in Vietnam at that time. The brand was later changed to Kido's ice cream. To date, Kido's still helds 60% market share of the medium and premium ice cream segment, while expanding its own niche in the market.

The acquisition of 51% stake in Vinabico conducted by late 2007 was also recognized as one of the successful acquisition deal of Kinh Do. Afterwards, KDC directly involved with the operation of this subsidiary. Recently, Vinabico was officially merged into the group and became a One Member Limited Liability Company 100% owned by Kinh Do. Through the merger of Vinabico that has leading market share in its segment, KDC achieved its goal of expanding into a new category namely fresh bakery products and decorating candy. According to Kinh Do, annual growth rate Vinabico reached 30% per annum.

An expert team of Vietnam M & A Forum also stated that the three above deals are representative examples of the M & A strategy that Kinh Do pursues in order to expand the core business. However, Professor Nigel Denscombe noted that the M & A journey of Kinh Do was also rather challenging with the Tribeco and Nutifood deals.

After divested out of the two stated above companies, for the first 6 months of 2013, Kinh Do marked a significant increase in profit as its finance expenses reduced to about one third of the expenses last year. Professor Nigel Denscombe noted that Kinh Do did not achieve the efficiency as expected in those two firms and in fact burdened significant losses. In addition, the group also made other non-core investments such as real estate which strategically had not brought any synergy to the group operations overall.

Mr. Nguyen Quang Thuan, General Director of Data and Analysis Stox Plus however argued that the assessment of an M&A deal to determine whether it is a success or failure depending upon the objectives of each party. "For example, regarding to the Tribeco deal, if Kinh Do’s objectives was to turn this unit into a specialized manufacturing facility to utilize excess capacity, then perhaps they succeeded. As for the Glico deal, I think we need more time to evaluate the success or failure of it", Mr. Thuan said.

Regarding to the future development strategy, Mr. Tran Kim Thanh, Chairman of Kinh Do said: "When the company's system becomes more stable and achieves the necessary scale, we will review the M&A strategy as a more important part in our overall growth strategy."

He also said that for 2013 the company will prepare the foundation of the merger and acquisition strategy in 2014. To accelerate the growth rate of Kinh Do, in addition to developing traditional products, Kinh Do will continue to expand and seek opportunities to invest in other categories following the Food & other essential consumption products strategy (Food & Flavor). "Also, we will seek partnership to develop the brand Kinh Do overseas" Mr. Thanh said.

Vnexpress.net