METRO Vietnam is a leading modern-trade wholesaler in Vietnam. Its operation started in 2002, and now has 19 cash & carry stores across 14 cities. For the fiscal year ended 30 September 2013, METRO Vietnam generated sales of about Bt22,000 million and reported earnings before interest, tax, depreciation, and amortization (EBITDA) of almost Bt500 million.
The acquisition of METRO Vietnam is in line with BJC's strategy to become a leading regional wholesaler and retailer covering the entire value chain. The expected benefits of the acquisition include access to the large Vietnamese grocery market, and positioning BJC for further successes in the ASEAN Economic Community. The transaction will enhance BJC's strengths and competitive position once BJC completes and succeeds in the post-merger integration of METRO Vietnam. However, this sizable investment could negatively affect BJC’s financial profile in the medium term if the acquisition is funded entirely with new debt. BJC’s board of directors meeting is scheduled on 19 August 2014 to finalize the financing structure.
TRIS Rating will resolve the CreditAlert of BJC after the transaction is completed and a comprehensive review of the company’s business strategy and financial arrangement can be made. The final rating action will take into consideration BJC's financial profile post-acquisition and the expected return from the transaction.