Masan Group (MSN) announced plans to increase its ownership in Masan Consumer (MCH) to nearly 75%. A wholly-owned subsidiary of Masan Group will purchase up to 73 million MCH shares, representing an additional 5,6% of outstanding shares. This transaction, conducted through negotiated deals and order matching on the HoSE, begins on 9/10 and aims to consolidate Masan's long-term consumer platform and increase its influence in core business segments.

The decision to increase investment stems from Masan Consumer's strong performance and consistent cash flow generation. From 2017 to the first half of this year, MCH achieved an average annual revenue growth of 11% and earnings before interest and taxes (EBIT) growth of 15%. During this period, the company distributed approximately USD 1,8 billion to shareholders. Preliminary Q3 results further underscore this strength, with MCH's revenue rising by approximately 16% year-on-year and EBIT showing double-digit growth. Masan anticipates continued growth, driven by the beverage sector, international expansion, and premiumization of core product categories.

Increasing its ownership stake will allow Masan Group to boost its allocated share of profits from MCH, provided the subsidiary maintains its strong business performance. Dividends attributable to the parent company will rise proportionally with the higher holding ratio after the transaction. MCH's profit distribution policy remains unchanged, with plans to pay cash dividends of up to 80% of net profit after tax. This strategic move ensures Masan benefits more directly from MCH's financial success.

Chin-su products. Photo: Masan

Chin-su products. Photo: Masan

Masan Group has secured diverse funding sources for this acquisition, avoiding reliance on a single new loan. These funds include dividends from member companies, proceeds from the shareholder base expansion program at Masan High-Tech Materials (MSR), and existing cash on the balance sheet. Recently, Masan received approximately USD 70 million from Masan Consumer's first interim dividend for 2026. The group also expects about USD 225 million in 2026 dividends from Masan High-Tech Materials, including previously unpaid portions.

Further bolstering its financial position, Masan High-Tech Materials received a USD 125 million investment from Elmet in a transaction completed on 1/10. These combined funds provide Masan Group with flexibility to allocate capital for new investments while maintaining its strategy of strengthening the balance sheet. The increase in MCH ownership proceeds concurrently with Masan's financial deleveraging efforts. Following the transaction, Masan projects its net debt to consolidated EBITDA ratio at the end of 2026 to be approximately 2,3 times, a reduction from 2,4 times recorded on 30/6.

This financing approach highlights the reallocation of cash flow generated by member companies back into the group's business segments. If MCH sustains its growth and dividend policy, the higher ownership stake could significantly enhance Masan's cash flow in the coming years, available for debt reduction or other strategic investments. While Masan increases its stake, Masan Consumer continues to seek broader external investor participation. The current transaction does not alter MCH's 20% free-float ratio, which HoSE uses for index calculations. MCH aims to raise this free-float ratio to approximately 25% in the long term.

Customers trying Tam Hoa hotpot products. Photo: Masan

Customers trying Tam Hoa hotpot products. Photo: Masan

The plan to acquire up to 73 million additional shares serves a dual purpose: it increases Masan's control over a key business segment while demonstrating the group's balanced approach to capital allocation between investment and debt reduction. The increased holding ratio will ensure Masan benefits more substantially from MCH's business results and dividends, all while maintaining its commitment to financial deleveraging.

Hoang Dan