Vietnam’s ICT giant FPT Corporation and the US-based ICT company Synnex signed a cooperation agreement on September 13, allowing Synnex to buy 47 percent of FPT’s stake in FPT Trading. (Photo ndh.vn)Hanoi (VNA) – Information-communication-technology (ICT) giantFPT Corporation (FPT) has sold 47 percent of its stake in distribution arm FPTTrading to US-based ICT product company Synnex.
The deal was announced on September 12, just one day after FPT releasedits resolution to reduce ownership in FPT Trading from 100 percent to below 50percent.
According to the cooperation agreement that was signed between FPT andSynnex on September 12, the US company will possess 47 percent of FPTTrading, which is valued at more than 80 million USD, or 1.8 trillion VND.
FPT will receive 932 billion VND from the deal, including the payment fromSynnex and the remaining profit of FPT Trading.
The group also announced it would sell maximum five percent of charter capitalin FPT Trading to employees who have made great efforts and contributions tothe development of the distribution arm.
“Synnex is known as one of the top ICT production distributors in the world andhas provided the most advanced and optimal distribution model for the market,”FPT Chairman Truong Gia Binh said in the group’s statement.
“We hope that FPT Trading will progress in the future based on a more efficientdevelopment strategy with the presence of Synnex in the company’s managementboard.”
Synnex General Director Evans Tu said the deal would offer Synnex the best wayto enter Vietnam’s ICT and electronics market as FPT Trading has proven itselfas a leading distributor for having developed an efficient, well-managed andwell-structured distribution network in the past 20 years.
Synnex is a US-based world class ICT value-added distributor and supply chainservices provider. The company ranks as the third largest ICT firm worldwideand made $33 billion turnover in 2016.
Before the deal was completed, FPT Trading was a subsidiary of FPT andcontributed only nine percent of the group’s total profit in 2016 – the lowestsince 2006.
The decline of the company’s profit was attributed to the fall of Appleproducts sales in Vietnam after the US largest listed company by marketcapitalisation changed its distribution policy, allowing local retailers todirectly import products from Apple to sell on the market.
FPT Trading performed the best in 2007, followed by 2008 and 2006.
It contributed 45 percent of FPT’s total profit in 2007, 33 percent in 2006 and34 percent in 2008.
The figures declined to 21 percent in 2009 and kept decreasing to 19 percent in2015.
In early August, FPT sold 30 percent of its ownership in FPT Digital Retail totwo investment funds – Dragon Capital and VinaCapital -- reducing its stake inthe retail unit to 55 percent from 85 per cent.
FPT announced its plan on divestment of the two sub units at the group’s annualshareholder meeting in April 2017 to return to the form of a profitable,sustainable, pure ICT business.-VNA
VNA
