The tie-up between Mobile World and Tran Anh Digital will have an impact on the structure of the retail market for electronic and IT products (Photo vnreview.vn) Hanoi (VNA) - The Competition and ConsumerProtection Department under the Ministry of Industry and Trade hasgiven the go-ahead for the merger and acquisition (M&A) deal between thetwo largest local electronic retailers – The Gioi Di Dong (Mobile World) and TranAnh Digital World.
Mobile World is planning to acquire 100 percent stake in TranAnh Digital World to form an economic concentration activity under themanagement of the competition authority.
The tie-up between the two companies will have an impact on thestructure of the retail market for electronic and IT products as they are thetwo largest retailers, with Tran Anh Digital owning 39 electronic outlets inthe north and Mobile World having over 1,500 stores nationwide.
Mobile World has three major brands - The Gioi Di Dong, Dien MayXanh and Bach Hoa Xanh.
Following the takeover, Tran Anh Digital will become asubsidiary of Mobile World, and they are expected to exercise a bigger marketpower after the acquisition.
After appraising the acquisition document and collectingopinions of similar businesses in the market, the Competition and ConsumerProtection Department said the increase in their market power is notsignificant as the market share of Mobile World before and after theacquisition is defined at over 30 percent for IT products, still being thedominant business in the sector.
“Based on the combined market share of the relevant market, theeconomic concentration between Mobile World and Anh Digital in the form of abusiness acquisition is not prohibited under Article 18 of the CompetitionLaw,” the department said in a message on Monday.
According to Article 18 of the 2004 Competition Law, an economicconcentration is prohibited if the combined market share of the enterprisesparticipating in this activity is more than 50 percent in the relevant market,except in case of an “exemption".
The department said it will continue to oversee the competitiveactivities of Mobile World in the retail market for household electronicdevices and IT products to timely detect any abuse of its dominant position inaccordance with the Competition Law.
At the shareholders’ meeting on August 28, Mobile World’s shareholders agreed with thecompany’s plan of putting aside 2.5 trillion VND (110 million USD) for M&Aactivities, targeting electronics and pharmaceutical retailing businesses.
Detailed information of the M&A between Mobile World and Tran Anh Digital, such as value or share swapratio, is yet to be released. However, in late September, two senior executivesof MobileWorld joined Tran AnhDigital’s managingboard.
On December 11, Mobile World said its board of managers approvedthe plan of issuing 6.7 million shares, equivalent to 2.18 percent of itsoutstanding shares, to fewer than 10 investors in a private placement.
The shares, expected before the year-end, are being offered at aminimum price of 90,000 VND per share and maximum price of 110,000 VND.
The new share issue is speculated to be designed to sell to TranAnh Digital’s senior stakeholders.
In addition, MobileWorld will issue over 9.22 million shares in an employee stock ownership planto its employees, which will have restricted transferring for four years.
Shares of Mobile World (code MWG on the HCM Stock Exchange) weretraded at some 128,000 VND per share, while Tran Anh Digital’s shares were valued at 33,000 VNDper share on December11.-VNA
Mobile World is planning to acquire 100 percent stake in TranAnh Digital World to form an economic concentration activity under themanagement of the competition authority.
The tie-up between the two companies will have an impact on thestructure of the retail market for electronic and IT products as they are thetwo largest retailers, with Tran Anh Digital owning 39 electronic outlets inthe north and Mobile World having over 1,500 stores nationwide.
Mobile World has three major brands - The Gioi Di Dong, Dien MayXanh and Bach Hoa Xanh.
Following the takeover, Tran Anh Digital will become asubsidiary of Mobile World, and they are expected to exercise a bigger marketpower after the acquisition.
After appraising the acquisition document and collectingopinions of similar businesses in the market, the Competition and ConsumerProtection Department said the increase in their market power is notsignificant as the market share of Mobile World before and after theacquisition is defined at over 30 percent for IT products, still being thedominant business in the sector.
“Based on the combined market share of the relevant market, theeconomic concentration between Mobile World and Anh Digital in the form of abusiness acquisition is not prohibited under Article 18 of the CompetitionLaw,” the department said in a message on Monday.
According to Article 18 of the 2004 Competition Law, an economicconcentration is prohibited if the combined market share of the enterprisesparticipating in this activity is more than 50 percent in the relevant market,except in case of an “exemption".
The department said it will continue to oversee the competitiveactivities of Mobile World in the retail market for household electronicdevices and IT products to timely detect any abuse of its dominant position inaccordance with the Competition Law.
At the shareholders’ meeting on August 28, Mobile World’s shareholders agreed with thecompany’s plan of putting aside 2.5 trillion VND (110 million USD) for M&Aactivities, targeting electronics and pharmaceutical retailing businesses.
Detailed information of the M&A between Mobile World and Tran Anh Digital, such as value or share swapratio, is yet to be released. However, in late September, two senior executivesof MobileWorld joined Tran AnhDigital’s managingboard.
On December 11, Mobile World said its board of managers approvedthe plan of issuing 6.7 million shares, equivalent to 2.18 percent of itsoutstanding shares, to fewer than 10 investors in a private placement.
The shares, expected before the year-end, are being offered at aminimum price of 90,000 VND per share and maximum price of 110,000 VND.
The new share issue is speculated to be designed to sell to TranAnh Digital’s senior stakeholders.
In addition, MobileWorld will issue over 9.22 million shares in an employee stock ownership planto its employees, which will have restricted transferring for four years.
Shares of Mobile World (code MWG on the HCM Stock Exchange) weretraded at some 128,000 VND per share, while Tran Anh Digital’s shares were valued at 33,000 VNDper share on December11.-VNA
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