You read that right, $2.5 billion.
It’s the amount of money we walked away from in 2012 when The Coca-Cola Company offered to acquire a controlling interest in Tân Hiệp Phát Beverage Group (THP), the family-owned business my parents founded in 1994.
I remember sitting in the glass-encased conference room at Coca-Cola’s headquarters, my head spinning. And although I was nervous, my heart beating furiously, I knew in that moment why my father had been so successful. His drive, determination, and self-belief were etched all over his sixty years. His poker face fixed and eyes focused gave nothing away.
We were being wooed – Coca-Cola wanted us to share their dream. Their presentations were designed to impress us, overawe us even. Most people would have been bowled over. We were sitting across the negotiating table from executives of one of the world’s biggest multinational corporations (MNC). According to Forbes’s rankings, Coca-Cola also owns the fifth most recognizable brand after Apple, Google, Microsoft and Facebook.
At the time, Coca-Cola generated revenues of $48 billion, and there was no corner of the planet where it was not aggressively marketing its products, including Vietnam. There was a lot of potential and both sides knew it. Coca-Cola showed us their plans to grab ever more market share across the emerging markets. In theory that would be a great thing, right?
Not for THP it wouldn’t be. If we had agreed to their terms would only be allowed to expand our own market share in Vietnam, Laos, and Cambodia – significantly reducing our potential. We’d have to hand over our export business to Thailand, Australia, and other parts of Asia. The terms specifically restricted THP from venturing into markets outside those three countries. The agreement also required THP to give up new product development. This constraint would have undercut one of our core strengths: THP’s record of product innovation achieved from a hard-won understanding of the Vietnamese market and its consumers.
At its core, the agreement undermined THP’s vision; it wasn’t a “win-win” partnership (which I will address later this month). THP’s vision was, and still is, to expand throughout Asia and beyond with new and exciting brands. We rejected Coca-Cola’s offer, walking away from the $2.5 billion payday and the history books. If the deal had gone ahead, it would have been the largest-ever foreign acquisition in Vietnam’s history by deal value. It still would be the second largest today.
Despite the “could have been” historic stats, it’s a decision we don’t regret and one that was best for us and our vision. Learn more about how to be the David amongst Goliaths in my recently published book, Competing with Giants by visiting, www.phuonguyentran.com.