Kohlberg Kravis Roberts & Co LP will pay $159 million for 10 percent of Vietnam's Masan Consumer Corp in the country's largest ever private equity investment, underscoring buyout funds' increasing appetite for Asian consumer-linked plays.
The deal comes as intense competition for assets in China and India pushes buyout firms into smaller frontier markets in pursuit of assets as they seek to deploy $73 billion in capital raised for investing but not yet used, revealed by Thomson Reuters data.
The deal values Masan Consumer, a unit of Masan Group and Vietnam's leading producer of fish, soya, chili sauce and branded noodles, at $1.6 billion.
KKR's Masan investment follows news last week of its plans to take Taiwan's Yageo Corp private in a deal that also values that company at $1.6 billion. The Masan Consumer deal is KKR's fourth investment in Southeast Asia and its first in Vietnam.
The deal will reduce Masan Group's stake in Masan Consumer to 78 percent from 86.6 percent. Shares in Masan Group rose 1.81 percent in early trade on Wednesday.
"This investment demonstrates our strong conviction in the business prospects of Masan Consumer, as well as in Vietnam as a whole," said Ming Lu of KKR.
The deal comes just a couple of months after U.S. private equity firm Mount Kellet Capital Management invested $100 million in Masan Group's mining unit, Masan Resources.
Masan has raised about $500 million in private equity capital in the past two years as the conglomerate's management looks to expand the company into a proxy for Vietnam's economy.
TPG Capital invested $35 million in 2009 in the Masan Group, which also has Techcombank among its assets.