China's CDH Investment Management Company Limited is in advanced talks to buy a minority stake in Bach Hoa Xanh Trading Joint Stock Company from Vietnam retailer Mobile World Investment Corporation (HOSE:MWG) in a deal that could value the grocery chain at up to $1.7 billion, two sources with direct knowledge said. CDH, one of China's biggest alternative investment firms and also a former Mobile World investor, has emerged as the frontrunner to buy a stake of up to 10% after outbidding rivals, the sources said. "CDH is looking to buy between 5% to 10% stake," one of the sources said, adding that deliberations were ongoing and there was no certainty that a deal will be sealed.

The second source said a deal "could be struck as early as next month if negotiations were successful". Both sources declined to be named as the matter was private. CDH and Mobile World, Vietnam's biggest retail group by market value, declined to comment when contacted by Reuters.

A deal by Beijing-based CDH would underscore global investors' interest in Vietnam's fast-growing business sectors including consumer, despite the country's property sector woes triggered by a crackdown on corruption. BHX's parent company, Mobile World, first announced its plan of a minority stake sale in the grocer in 2022 but then put it on hold due to unfavorable market conditions. The sale process was restarted last year and had attracted interest from Singapore sovereign wealth fund GIC (GIC.UL) and companies from Thailand, Reuters reported at the time.