DC Advisory advised Sumitomo Forestry on its strategic investment in An Cuong Wood Working JSC

Background

• Sumitomo Forestry Co., Ltd (Sumitomo Forestry), the listed Japan-based comprehensive housing and wood products company, acquired a 10% stake in An Cuong Wood Working JSC (An Cuong), Vietnam’s largest interior building materials processing and distribution company, through its wholly-owned subsidiary Sumitomo Forestry Singapore Ltd
• The capital and business alliance was established to help both parties achieve the following targets:
  • Build a supply chain in Vietnam spanning materials procurement through to housing construction;
  • Import and sell high quality Japanese building materials to Vietnam by leveraging An Cuong’s sales network; and
  • Leverage Sumitomo Forestry’s distribution network to expand overseas sales of An Cuong’s products to overseas markets including Japan

Process

• Sumitomo Forestry engaged DC Advisory (DC) to assist in bilateral negotiations with An Cuong
• DC helped to structure the transaction which comprised both vendor and new shares, and negotiated the definitive agreements which included the share purchase agreement, the share subscription agreement and the shareholders' agreement

Outcome

• After the transaction, Sumitomo Forestry became one of An Cuong’s foreign strategic shareholders, the others comprising VinaCapital Group and DEG from Germany
• The investment established a foundation for a strategic partnership between Sumitomo Forestry and An Cuong, enabling both companies to expand their businesses by bringing An Cuong products to overseas markets including Japan