M&A market in Vietnam sees development potential

VNA

Despite unpredictable ups and downs in both the number and scale of deals over the past five years, the Merger and Acquisition (M&A) market in Vietnam was rated as the eighth busiest market in Asia-Pacific.

Dinh Vu industiral zone (Source: VNA)

The value of M&A deals has strongly increased, particularly during the 2009-2011 period.

The market saw 295 deals with a total value of 1.14 billion USD in 2009.

In the following year, 245 transactions were conducted at a total value of 1.75 billion USD, a rise of 54 percent over the previous year.

In 2011, a total of 266 M&A deals raised 4.7 billion USD, a year-on-year increase of 135 percent.

Last year, the M&A market was worth a total of 4.95 billion USD from 157 deals, a rise of 5.3 percent in value compared to the previous year. Despite the decrease in the number of deals, the large transactions helped keep the market value at a stable level.

In December 2012, Vietinbank, one of the leading State-owned commercial banks in Vietnam , collected 743 million USD after selling a 20 percent strategic stake to the Bank of Tokyo Mitsubishi UFJ (BTMU).
Thailand ’s Siam Cement Group acquired 85 percent of Prime Group’s shares worth 240 million USD in the same year.

The first six months of this year also saw various M&A deals, particularly an impressive deal of the largest commercial property company in Vietnam , VinGroup, which collected 470 million USD from selling one of its commercial centres to its Vietnamese partner VIPD.

Recently, foreign investors seem to be more interested in Vietnam ’s M&A market, particularly Japanese investors.

Vietnam ’s market in 2013-2014 still creates opportunities for both foreign investors and domestic enterprises with an increasing trend of transferring from foreign direct investment (FDI) to indirect investments through M&A, forecast specialists in the field.

Nguyen Quang Thuan, General Director of Stoxplus Financial Media Corportion, predicted that the M&A market will be much more dynamic in property, food and drink, cement, finance and banking.

“Our database shows that there are presently 10 M&A food and drink deals in the process of negotiation. Foreign investors, specifically Japanese investors, will continue publicising new deals in the coming time,” said Thuan.

Meanwhile Robert Tran, CEO of Canada ’s Robeny Consultancy Group in Asia and the US , said pharmaceutical industry, pet food and education will receive more attention in the time to come. He added that his company receives various requests from American and Canadian small and medium-sized enterprises about pharmaceutical factories in Vietnam .

This August, the largest annual M&A forum in Vietnam will be held in Ho Chi Minh City and is expected to attract leaders from more than 500 domestic and international corporations, groups and companies.

It will focus on the quality of investment connection activities in order to create greater cooperation opportunities, said Dang Xuan Minh, the Deputy Head of the forum’s organising board, when talking to Dau Tu (Investment) Newspaper about the event.

This forum will sum up M&A activities in the country over the past five years and forecast the trend and opportunities in the coming years.

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