It is quite an interesting cooperation when Master Ad Public Company Limited (MACO) invests 457.2 million baht to acquire a 25% stake in VGI Vietnam Joint Stock Company (VGI Vietnam) to penetrate Out of Home (OOH) media in Vietnam through a subsidiary VGI MACO (Singapore) Private Limited (VGIMS).
This deal is similar to the one MACO has with Plan B Media Public Company Limited (PLANB) not long ago. At that time, PLANB purchased MACO’s newly issued shares by putting its asset –Hello Bangkok– on the table for the exchange. After the transaction, PLANB took the position of MACO’s major shareholders.
The highlight of this deal is that PLANB will have the right to manage all of MACO’s OOH media for a period of five years. As for MACO, the company will perform only construction works, managing, installation and maintenance of the advertising media, then wait for a revenue sharing from PLANB at an average of 700 million baht per annum.
Back to the MACO and VGI deal. MACO has already penetrated the advertising business in Vietnam in which the country has nearly a hundred million in population with economic growth of 7%. More importantly, Vietnam has a high purchasing power.
Vietnam has the capital for advertising as high as 1.22 billion dollars. In the media business, TV comes in the first place, printing media is second and the OOH media comes in third. This will give MACO the opportunity to find more revenue from Vietnam’s market and compensate for the lost revenue in the Thai market to PLANB.
As for VGI Vietnam, who is familiar with the traditional way of media business, will acquire the know-how of new technologies from MACO to strengthen the business to compete in the modern digital era.
To sum it up, there are no losers in this deal, only a win-win solution for both parties.
It is clear that MACO decides to take a step back and let PLANB drive the media business in Thailand while MACO itself will take its talent to international markets (which could have a higher return than the domestic market).
To say that the deal is a win-win solution for both parties, but that does not mean 50-50 equally profit. The one who benefits the most would be none other than VGI Public Company Limited (VGI) as the company that holds a stake in both MACO and PLANB at a ratio of 33.17% and 18.80%, respectively, at the top of the pyramid scheme.