VIETNAM NATIONAL UNIVERSITY

HO CHI MINH CITY

INTERNATIONAL UNIVERSITY
SCHOOL OF BUSINESS
--------OOO--------

REPORT
Lecturer: Trinh Thu Nga, Ph.D.
Course: INVESTMENT BANKING
Semester 2 (2020 – 2021)

Group members:
Full name Student ID
Điền Hồ Tiên Ngọc BAFNIU18250
Hoàng Phúc Thiên Ân BAFNIU18217
Nguyễn Phan Thanh Trúc BAFNIU18188
Nguyễn Thanh Nga BAFNIU18195
Phạm Ngọc Minh Anh BAFNIU18014
 CONTENT
I. INTRODUCTION .........................................................................................................2
II. PART I...........................................................................................................................4
1. What is the core business of the acquiring firm and
the acquired firm?
2. What was the motivation of the M&A transaction?
3. What was the type of the M&A transaction?
4. Was the deal friendly or hostile? When was the
deal completed?
5. What was the purchase price of the deal? What
was the method of payment/consideration?
6. Who was the investment banker of the transaction?
III. PART II .........................................................................................................................6
1. Discuss the synergies that two combined firms
expected to achieve
2. Factors that acquiring firm’s member should
consider before doing the M&A deal
IV. PART III ........................................................................................................................10
V. PART IV ........................................................................................................................11
1. Before and after the M&A deal
2. Achieve the expected synergies
VI. REFERENCE ................................................................................................................15

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INTRODUCTION:

VINAMILK (VNM):

Vinamilk is the abbreviated name . This company has full name is Vietnam Dairy
Products Joint Stock Company. Vinamilk has 212,000 retail locations. The company dominates
the domestic market about 55% market share of liquid milk, 85% of yogurt, 80% of condensed
milk and reigns in all 3 forms of distribution, wholesale and retail (212,000 Retail location) and
direct distribution stores (575 stores). Vinamilk products are also available in nearly 1,500 large
and small supermarkets and nearly 600 convenience stores nationwide. Vinamilk has been
exported to 43 countries and territories.

Currently, Vinamilk is the largest dairy company in Vietnam holds 50% of the dairy
market with a portfolio of more than 200 products. Vinamilk has a system of 10 farms spread
throughout Vietnam meeting the Global GAP standard with all breeding cows imported from
Australia, USA and New Zealand. Moreover, Vinamilk's products are being manufactured by 13
factories, including two super powdered milk and liquid milk factories in Binh Duong equipped
with the most advanced technology in the world.

The success of Vinamilk is associated with the leadership role of Ms. Mai Kieu Lien,
General Director of the company. In addition to domestic strategies, Mai Kieu Lien's courage
and determination are evidenced in the globalization strategy. Not only domestic investment,
Vinamilk also strongly invested abroad. Owning a 100% share of Driftwood (USA) in May, each
year, Vinamilk earns several trillion VND more revenue from this company. In 2012, Vinamilk
contributed capital to the Miraka factory in New Zealand, bringing a total of more than 2 million
NZD to Vinamilk. Built the first milk factory in Cambodia, when in May inaugurated the $ 23
million Angkor Milk factory in the country of pagodas, with a capacity of 38 million liters of
liquid milk, 192 million jars of yogurt / year.

Starting in 2000, until now, the Middle East has become the main market, contributing
more than 75% to the total revenue from Vinamilk's export business. Experiences in the market,
strategies to produce products suitable to the tastes and prestige built for nearly 20 years have
helped Vinamilk have a solid development in the Middle East.

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 In addition to the Middle East, Vinamilk also promotes business activities in other
markets such as Asia with countries such as Japan, South Korea, Singapore, China and is present
in most Southeast Asian countries ... In 2019, Vinamilk received the Asian Export Enterprise
Awards 2019 (The Asian Export Awards 2019) in the table of large enterprises in the region.

GTNFOODS (GTN):

Thong Nhat Investment and Production Joint Stock Company, formerly known as Dai
Viet Minerals and Environment Joint Stock Company, was established on May 30, 2011 with a
charter capital of VND 80 billion. Since its establishment, the Company has maintained its
operating model as a Joint Stock Company.

In June 2016, the Company changed its name to GTNFOODS Joint Stock Company,
operating in many fields such as: Industrial bamboo production, infrastructure construction,
agricultural products, food, agricultural materials, minerals, etc. building materials, plastics,
telecommunication cable. However, GTNfoods aims to become a leading enterprise in Vietnam
in clean food with a sustainable and closed agricultural value chain in the Milk and Tea industry.

The strength of the company is a team of qualified leaders with many years of domestic
and international experience, with in-depth experience in organizational restructuring, improving
operational efficiency. Moreover, the member companies have had a long development process,
experienced the ups and downs of the Vietnamese economy, and have been asserting their
position in the domestic market. In the future, the company intends to continue to invest strongly
in subsidiaries and affiliates to bring GTNfoods to international stature.

GTNfoods currently trades a variety of products, including Vietnamese Tea (Vinatea),

Moc Chau Milk (MCM, indirectly owned through Vietnam Livestock Corporation-Vilico), and
Da Lat Wine (VDL).The mainstay of GTNfoods is milk or more specifically, the brand Moc
Chau Milk (MCM) with 2019 revenue of VND 2558 billion.

 GTNfoods itself has also been researched to be able to access the Chinese market soon
and Moc Chau Milk is one of five Vietnamese dairy companies that meet the export
standards to the Chinese market. Moreover, Moc Chau is a northern mountainous

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 province bordering China, so it has many advantages in trade and product development.
In addition, GTNfoods has a potential source of raw materials and land bank. With the
advantage of climate and ideal soil of Moc Chau plateau, Moc Chau Milk currently owns
more than 3,000 dairy cows on the farm and 24,500 cows through close association with
more than 600 livestock farmers dairy cows and has 3 large dairy breeding centers. To
process the above-mentioned abundant raw materials, Moc Chau Milk currently owns
two milk processing factories (pasteurized and pasteurized) with a capacity of 250 tons of
milk/day, 150,000 milk cartons/hour and a feed factory eat cattle.

 Besides the strength in milk, GTNfoods is also quite successful in the field of tea.
Vinatea has also completely changed after returning to GTNfoods from the raw material
area, to diversified products, to a larger market. After 2 years under the takeover of GTN,
in 2017, Vinatea achieved nearly double the revenue compared to the time before
equitization, rising to become the leading tea product manufacturer in Vietnam. 4,700
hectares of agricultural land with many material areas meeting the standards of
sustainable development. Each year, Vinatea supplies to the market 10,000 tons of tea
domestically and for export, ensuring quality and safety because it has managed a clean
raw material area.

PART I:

1. What is the core business of the acquiring firm and the acquired firm?

The core business of the acquired firm (GTNFoods) includes the agricultural sector and food
and beverage (F&B) sectors with a charter capital of VND2.5 trillion ($108.7 million).

Breeding purebred dairy cows and pigs (agriculture), manufacturing and processing dairy
products, alcohol, synthetic resin (essential consumer goods). GTNFoods enterprise invests in
these two areas by investing in state-owned companies such as holding 74.5% stake in Vilico,
95% stake in VinaTea.

The core business of the acquiring firm (VNM): The main business activities of this company
include processing, manufacturing and trading fresh milk, canned milk, powdered milk,

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nutritious powder, yogurt, condensed milk, soymilk, and beverage (fruit milk), soymilk and other
dairy product.

2. What was the motivation of the M&A transaction?

Benefit from increasing market share (from Moc Chau Dairy Company- the company has a
strong foothold in the North with 23% share in North market): acquiring Moc Chau Milk
Company indirectly (VNM has 75% stake of GTNFoods, GTNFoods has 74.5% stake in Vilico,
Vilico has 51% stake in Moc Chau Milk Company). In another words, Moc Chau company
which is a subsidiary of GTNFoods.

“Moc Chau Milk has ample land banks and an extensive farm system that will benefit from
Vinamilk's management system and enterprise resource planning (ERP) software,” Huong said.
This means that Moc Chau helps to expand the supply of raw materials to VNM, which has only
farms in Laos as the main source. Moc Chau owns 25,000 purebred dairy cows with an estimated
growth rate of 10-15% per year. In addition, Moc Chau also has a large land fund with a cool
climate to build dairy farms.

3. What was the type of the M&A transaction?

This is the friendly takeover in acquiring. Because GTNFoods is willing to be purchased by

VNM through the approval of GTNFoods shareholders.

The purchase was implemented two days after the shareholders of GTNFoods approved the
plan to hand over shares via a private placement.

Previously, the two parties held numerous rounds of negotiation since Vinamilk became a
large shareholder of GTNFoods.

4. Was the deal friendly or hostile? When was the deal completed?

Friendly deal. Acquifer (VNM) made a public offer to buy more shares of the target
company (GTNFoods). At the end of March 2019, Vinamilk publicly offered more than 116.7
million GTN shares equivalent to 46.68% of GTNFoods' capital, with an estimated amount of
VND 1,517 billion. But this deal was failed beacause 3/6 members of GTNFoods' Board of
Directors disagree. On December 16, 2109, GTNFoods shareholders approved a report allowing

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Vinamilk to increase its ownership to 75% without public offering. Although earlier, in March,
the same report was vetoed by GTNFoods Board members.

Vinamilk purchased nearly 78.6 million GTNFoods shares on December 18 and 19, 2019.
Trading was concentrated mainly on December 18 when GTN shares were agreed to surge more
than 78.9 million shares at the price of VND 22,800 per share, corresponding to a total value of
nearly VND 1,800 billion.

5. What was the purchase price of the deal? What was the method of
payment/consideration?

Vinamilk's capital spent on this deal is nearly VND 1800 billion (Vinamilk has spent a total
of VND 3,400 billion to acquire 75% of GTN's shares) and this amount is likely to be reduced
indirectly when GTN is asking shareholders to divest all 3 subsidiaries outside the core business,
expected to earn an amount of about VND 734 billion.

Stock purchase is this form of acquisition; however, the greater the trust management in the
acquisition, the more they will want to pay for the stock in cash. This is because management
believes that the stock will eventually be more valuable after the agreement is made from the
merger.

6. Who was the investment banker of the transaction?

No information (confirmed with teacher).

PART II:

1. Discuss the synergies that two combined firms expected to achieve:

At the end of 2019, Vietnam Dairy Products Joint Stock Company (Vinamilk, stock: VNM)
completed the purchase of nearly 78.6 million GTN shares of GTNFoods JSC by the method of
agreement and matching on HOSE and increased the ownership from 43% to 75%, officially
becoming the parent company of GTN. TRADE VALUE: 3,461 BILLION VND equivalent
PRICE 19,000 VND / share.

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 Vinamilk's current purpose is very much aspire to stand firmly on the "home ground" so as to
focus its energy on reaching out to the big sea. Standing firmly on the home ground, the story of
expanding the raw milk area and reducing production costs is an inevitable story.

Vinamilk stepped in, after completing the purchase of 75% of the capital at GTNfoods - the
parent company of Moc Chau Milk; Vinamilk has conducted a new restructuring: restructuring
the leadership staff, holding the annual General Meeting of Shareholders to approve the
important issues. Immediately after the General Meeting, the work of adding value to the target
companies was carried out quickly.

M&A GTNfoods, Vinamilk not only helped both sides solve a series of old problems but also
opened a big step forward in the distribution system and development of fresh milk material
areas. In the same house, the two sides will not have to compete with each other but will focus
on building the two companies into a model of effective investment, solidarity to grow together
in the industry in Vietnam, continue to seek opportunities for development and expansion in the
domestic market as well as in the world. Acquiring GTN will bring a number of benefits to VNM
in the long term, including:

First of all, increasing market share - GTN's dairy subsidiary, Moc Chau Milk, is currently
recording annual milk sales of about $107 million compared to VNM's roughly $2 billion in
domestic milk sales during the year 2019, according to the forecast of Ban Viet Securities
Company (VCBS).

Secondly, increasing domestic milk supply chain depend on GTN's dairy herd as well as
potential land fund to expand farming. GTN currently owns about 3,000 dairy cows and
purchases from about 20,000 other cows from associated farmers compared to VNM's
approximately 30,000 and over 120,000 respectively.

Third, make it impossible for competitors to acquire Moc Chau Milk.

The recently published analysis report of MBS Securities Company assessed that GTN is in
good shape with improved profit and net asset balance thanks to strong restructuring activities.
According to MBS, focusing on core business, GTN has high growth opportunities. In 2019,
GTN in turn divested from subsidiaries GTNFarms, GTNfoods Asset Exploitation Company,

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GTNfoods Consumer Goods Company, reducing its ownership rate in Vinatea to 20% to focus
resources on the business segment. Main business - Moc Chau fresh milk (MCM). According to
the Q2/2020 report, the cash balance is about VND 2,144 billion, partly from restructuring
activities.

Experts highly appreciate Vinamilk's participation in GTN's Board of Directors. Currently,

VNM owns 75.3% of shares of Moc Chau Milk (MCM). VNM's participation in GTN's Board of
Directors has helped improve GTN's management ability and operational efficiency.

Specifically, MCM's gross profit margin improved from 17.7% in the first half of 2019 to
28.9% in the first half of 2020. This result comes from the improvement in the profit margin of
the fresh milk segment from 21% in 2019 to 32% in the first half of 2020.

In 2020, MCM will issue about 43.2 million new shares with total proceeds about 1,249
billion VND, of which 29.5 million shares will be sold to GTN, 9.7 million shares will be sold to
VNM . This will bring GTN's total ownership in Moc Chau Milk to 51%. The proceeds are
expected to be used to expand the existing farm to 2,000 cows as well as invest in a new 200 ha
site with 4,000 cows.

2. Factors that acquiring firm’s member should consider before doing the M&A deal:

a) Check the accuracy of the information:

In fact, the information and data reported are often hidden by the conflict of benefits between the
buyer and the seller. Therefore, checking the accuracy of information is the first principle that
businesses must follow when conducting an M&A deal.

In order for M&A activities to become professional and attractive to investors, legal agencies
need to provide guidance and regulations for acquired firm on how to give important and
necessary information to investors. the public and also give penalties for giving false
information, concealing information that is detrimental to buyers....

b) Pay attention to the potential of the business:

The value of an enterprise is not only in tangible assets such as machinery, factories, capital...
but also in other intangible assets. The value of an M&A deal increases or decreases depends a

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lot on intangible assets such as strategy, vision, human resources, brand, proprietary products,
listing status ….

c) Analyze and forecast risks:

The level of success after M&A depends a lot on a clear plan and strategy with predictable
risks of the bosses. Buyers need to be careful with bad debts that aren't listed on the books, assets
that aren't depreciated when they're practically ruined, or cash flows from the sale of fixed assets
rather than from the sale of goods…

Occasionally the parties are more concerned about financial issues that they forget about
legal risks. Legal risks may include: operational risks (being suspended or forced into bankruptcy
due to violations of tax obligations or outstanding amounts of money, non-compliance with legal
regulations (business law); the risk comes from the state management agency - the subject has
the right to issue administrative decisions and has an apparatus available to enforce this decision;
from the legal actions of the partner - the subject has the right to act or not act on the basis of an
agreement between the parties; risks from intentional, unintentional or careless acts of managers
and employees of the enterprise; dispute,…. leading to the business being sued or entangled in
other legal issues. Therefore, conducting a legal check before deciding to buy is really necessary.
Depending on the actual transaction, the specific industry of the target enterprise in the M&A
activity or depending on the agreement between the buyer and the seller, the document
requirements for legal due diligence may be drafted.

Financial risk - this is also a risk that the buyer is particularly interested in. These risks may
include capital risk (for example, the buyer has not contributed enough capital, business capital is
not transparent ...), asset risk (the valuation of assets is not true to the actual value), risks of debts
to state agencies and partners. Normally, to control financial risks for large M&A transactions,
the parties will hire independent auditors to audit and review all financial statements, assets and
related issues of the enterprise to produce the financial appraisal report. In addition, it is possible
to hire appraisers to evaluate the assets of the enterprise if the parties cannot agree on the
valuation themselves. Based on these reports, the buyer can see the financial data and risks to
decide whether to buy or not, as well as a basis for negotiating the purchase price.

d) Rely on an intermediary:

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 Brokers not only establish a "market" for buyers and sellers to meet conveniently, but can
also multiply the success of an M&A deal. Therefore, it is necessary to choose qualified,
experienced and reputable people to bring high quality services to your business.

e) Using consulting in specialized stages:

This is a measure to overcome the lack of understanding of the law, knowledge in the stages
of valuation, restructuring, etc. in enterprises. Legal consultants and lawyers not only provide
information and explain the law on M&A, but also give advice to prevent disputes and legal risks
during the implementation of M&A activities for businesses. Consulting organizations will
support enterprises in effective restructuring, attracting more investment, healthyizing corporate
finance, determining their direction after the merger...

PART III:

When a firm is evaluated as an ongoing business, three major techniques of evaluation are
used: (1) DCF analysis, (2) comparable company analysis and (3) precedent transactions. These
are the most frequent assessment practices for investment banking, market research, private
equity, business growth, M&A, levied purchasing (LBO) and most finance fields. These are
standard valuation approaches.

Discounted Cash Flow (DCF) is an ingredient valuation analysis in which an investor

predicts the unlean cash flow in the future of the company and reduces it to the weighted average
share capital cost of today (WACC).

DCF analyses are carried out in Excel by developing a financial model that involves a great
deal of detail and interpretation. The methods are the most precise and most calculations and
assumptions are needed. The work taken to develop a DCF model, however, also leads to the
most precise assessment. The DCF models help the analyst to predict and even analyze
susceptibility based on various scenarios.

For larger companies, DCF meaning is usually a sum of the parts study, which model and
combine various business units. See CFI DCF infographic model for more details.

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 A form of business framework, the discounted income model (* DCF framework) assesses
the firm by calculating its cash flows and reducing the cash flows to a current current present
value. This DCF is commonly used throughout the world as well as in training. The evaluation of
firms using this DCF is seen by investors, personal equity, equity research and 'wage side'
investors as the essential skills. (The Oasis of Wall Street) Discounted computations of cash flow
have been utilized in some form since money in ancient times was initially given to interest.
Ancient Egyptian and Babylonian mathematics studies imply that procedures comparable to
discounts on future cash flows were applied. The technique of valuation of the asset differed
between the book value based on the amount of the asset paid. The discounted cash flow analysis
became popular during the stock crash of 1929 as a stock valuation approach. Irving Fisher first
officially articulated the DCF approach in contemporary economic language in his book, The
Theory of Interest in 1930, and John Williams's 1938 The Theory of Investment Value. The DCF
analysis is a means of estimating a project, enterprise or asset using the time value concept of
money. The DFCF technique is a suitable metric for the valuation of securities on a secondary
market in pricing decisions.

The DFCF using the capital approach expresses the company's current worth as a function of its
future cash income capability, which is assigned to shareholders. This approach is based on the
idea that the value of a firm is assessed in future streams of valuation cash flow, which are at a
suitable reduction rate at present. The DFCF approach employing the FCF values the advantages
to the company's shareholders. This is calculated by providing a projection of the company's free
cash flow, which is based on the company's future expected revenues, and the current value of
the cash flows is reduced. The DFCF approach is the most suitable basis for establishing a
company's eaming capacity. It expresses in terms of current value the worth of a firm as a
function of future expectations of cash. The methodology is aimed at measuring the inherent
capacity of the company to earn cash from its owners.

Comparable company analysis is a comparable valuation approach in which you comparison

the actual value of a firm with other related enterprises by looking at multiples of trade, whether
P/E, EV/EBITDA or another measure. Compare company values or "pear-group analysis," or
"equity comps" or public sector multiples." The most popular assessment form is EBITDA
multiple.

The Compo's assessment approach offers the company an observable benefit depending
on the value already attached to other similar firms. Comps are the most popular solution, as they
are simple to quantify and constantly updated. The following reasoning follows since X has a
P/E 10 times and Y has a share earnings of 2,50 dollars, the Y stock must be valued at 25 dollars
per share (assuming the companies have similar attributes).

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 For the purpose of valuation of target company through DFC methodology, we have relied
upon the projections provided by report from GTNFoods for year 2020 ending December 31st
with 5645808 (VND millions) - Terminal Value along with the discussions held with the
management and extrapolating the free cash flows at an annual growth rate of 1 percent to
perpetuity. The Cost of Equity has been deterrmined at 8.12% and the cost of debt is 0%.

With EBITDA method, we can estimate that equity value per share is 16604VND, lower
than current stock price with 22800VND. With Perpetuity method, we can estimate that equity
value per share is 31279VND, higher than current stock price by 8479VND. With EBIT method,
we can estimate that equity value per share is 29047VND, lower than current stock price by
92VND.

PART IV:

BEFORE:

GTN

The consolidated business results of GTN (owning 51% of MCM) for the period 2017-2019
showed a negative and inefficient trend. Specifically, revenue in the period 2017 - 2019
continuously decreased, from 3,781 billion to 2,970 billion (equivalent to CAGR = -11.4%)
while selling and administrative expenses increased times. 13.6% and 6.6% respectively to 343
billion and 166 billion. Along with that, both ROE and ROA of GTN in the above period are
always < 1%.

Charter capital: 2,500 billion VND

Number of outstanding shares: 250,000,000 shares

In the first 9 months of 2019, GTN recorded VND 2.3 trillion in revenue and VND 7 billion
in after-tax profit after minority interests compared to VND 42 trillion and VND 8.4 trillion
respectively VNM.

AFTER

1. VNM

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  After acquiring GTN and consolidating the business from 2020, Vinamilk's cow herd size
will increase to 157,500 heads with a total annual capacity of 1.6 million tons of
milk/year. Thanks to that cumulative advantage, it is estimated that in 2020, VNM's total
market share (by revenue) will increase to 59 - 60% of the whole industry.

 In 2020, consolidated revenue reached VND 59,723 billion and net profit was
approximately VND 11,100 billion, up 6% and more than 10% respectively compared to
2019.
 At present, the potential for cattle herd expansion in Moc Chau plateau is still very large,
if VNM can exploit this potential to the fullest, the size of VNM's herd (including MCM)
can reach 230,000 heads and increase the factory capacity to more than 2 million tons of
milk/year. Together with the product diversification and strong brand position of VNM
and MCM, VNM will be able to maintain its leading position in the domestic dairy
market with market share (by revenue) in the future can be up to 70-75%.
 By the end of 2020, Vinamilk's total assets were over 48,438 billion VND, an increase of
more than 8% compared to the beginning of the year. In which, cash and cash equivalents
account for more than 2,111 billion VND and the company has more than 17,300 billion
VND in term deposits. The company's liabilities are about 14,785 billion VND,
calculated at the same time.
 Building a solid farming area will be a prerequisite for dairy businesses to maintain their
position in the domestic market, thereby serving as a springboard for exporting to
international markets. With the strategy of promoting dairy exports to new markets in the
near future, especially the Chinese market, the resonance of VNM and MCM is an
extremely important factor because currently VNM only owns 1 farming area in the
North in Tuyen Quang province and 1 dairy factory in Bac Ninh province. Meanwhile,
MCM is one of five Vietnamese enterprises (including Vinamilk, TH True Milk, Moc
Chau Milk, Nutifood and Hanoimilk) proposed to export to China and owns a potential
farming area in the same location strategy in the North. Therefore, after this deal, VNM
seems to have an important card to help the company penetrate deeper into the Chinese
market.

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 2. GTN
 In 2019, GTN's gross profit margin was only 15.7% compared to VNM's 47.2%.
Therefore, there is still a fairly wide margin for GTN to improve. Not only that, GTN can
also increase its revenue and market share by taking advantage of VNM's distribution
chain to expand consumption markets such as bringing products to the Central and
Southern regions or exporting to other countries suitable market.
 In 2020, GTNfoods recorded a 5% decrease in consolidated net revenue to VND 2,826
billion.
 Thanks to the sharp decrease in COGS, gross profit for the whole year increased by 78%.
Together with the financial revenue increased by 81%, GTNfoods' after-tax profit
increased by nearly 35 times compared to 2019, reaching VND 251 billion. However, the
company still has accumulated losses of VND 133 billion by the end of 2020.
 At the end of 2020, the total assets of GTNfoods are more than VND 4,188 billion, an
increase of more than 4% compared to the first day of the year. In which, cash and term
deposits of 3 - 12 months accounted for more than half of total assets, more than 2,281
billion dong, up 15%.
 Short-term receivables and inventory accounted for 8% of total assets, up 2% y/y to
VND374 billion.
 The capital side of GTNfoods includes VND 472 billion of liabilities, equivalent to the
first day of the year and accounts for 1/10 of the total capital. The company does not use
debt to borrow.
 In 2020, GTNFoods' after-tax profit is 37 times higher than in 2019 when reaching VND
251 billion, exceeding 154% of the year's profit plan.

Achieve the expected synergies:

1. Increasing market share - According to VCSC estimates, GTN's dairy subsidiary, Moc
Chau Milk, has yearly milk sales of over $ 107 million, compared to VNM's domestic
milk sales of around $ 2 billion in 2019.

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 2. GTN's dairy herd, as well as a prospective land bank to enhance dairy farming, are
increasing domestic input milk supply. GTN owns approximately 3,000 dairy cows and
purchases approximately 20,000 additional dairy cows from connected farmers,
compared to approximately 30,000 and more than 120,000 for VNM, respectively.
3. Owning Moc Chau Milk - a potential business. Makes competitors unable to acquire Moc
Chau Milk:
 GTN currently owns major brands like Vietnam Tea (Vinatea), Moc Chau Milk
(MCM, which is indirectly owned by Vietnam Livestock Corporation - Vilico), and
Dalat Wine (VDL). In the domestic food and beverage industry, these are well-known
and established brands. Over the years, Moc Chau Milk's dairy business has provided
significant revenue and profit to GTN's operations. MCM contributed 82.5 percent of
revenue and 99 percent of gross profit in 2018, despite accounting for only 52 percent
of GTN's total assets.
 GTN's stock price increased by 115% in 2019 from VND 10,000/share to VND
21,000/share on the stock exchange. GTN closed at 21,950 VND/share with 353,340
VND/share at the end of the session on 9/12/19.

Vinamilk's brand value was valued by Forbes Vietnam at more than $2.4 billion, equivalent
to more than VND55 trillion, accounting for more than 20% of the total value of the Top 50
leading brands in Vietnam in 2020. Total brand value the performance of the 2020 list reached
more than 12.6 billion USD, an increase of 22% compared to the 2019 list. Meanwhile, using the
DCF method, the total enterprise value of the GTN is VND 635,214 million with the EBITDA
method and VND 1,050,639 million with the perpetuity method.

Once acquired by VNM, GTN will benefit from increased economies of scale which will
contribute to average annual cost savings. The total cost of the transaction is estimated at 3,461
billion VND.

Hence, the equity value of GTN after the acquisition would be between VND 288,944 and
VND 704,369 million.

V. REFERENCES:

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 https://leto.vn/huong-dan-toan-dien-quy-trinh-m-a-cho-ben-mua-va-ben-ban.htm

https://sanmuabandoanhnghiep.vn/article/tuyet-ki-de-m_a-thanh-cong-454.html

https://luattriminh.vn/nhung-dieu-can-luu-y-khi-mua-lai-doanh-nghiep-khac.html

https://bvsc.com.vn/News/2020827/813248/sau-vu-m-a-kinh-dien-voi-vinamilk-gtn-dang-beo-bo-
nhu-the-nao.aspx

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