M&A Activities in Vietnam in Recent Years

Vietnam’s population is more than 90 million people so that foreign investors are looking at Vietnam as a fertile ground to expand their market by M&A deals.

Accordingly, along with the process of restructuring the economy and international integration of Vietnam, in recent years, merger andacquisition (M&A) activities have been fairly active, in which many major transactions involving Thai enterprises.

In 2009, the total value of M&A transactions in Vietnam reached 1 billion USD then in 2015, the number is 5 billion USD. Particularly for the first 6 months of 2016, the value of M&A in Vietnam has exceeded 3 billion USD, in which it took place in such sectors as retail, commodities and real estate…

Thailand, Japan and Singapore are still the major buyers in Vietnam market. While Japan invests in companies in aviation, petroleum and pharmaceutical sectors, Singapore emerges with commercial real estate projects. Lastly, Thailand continues to focus on the retail segment with the goal of expanding the market.

Head of M&A transactions last year is the retail sector and consumer goods, accounting for 38.46% of the total value. In particular, the scale of 2 M&A deals from Thailand accounted for 24.8% of the total value of 2015 and the first half of 2016. This shows the trend that retail businesses at home and abroad continue to explore the market with more than 90 million people of Vietnam. Recently, Thailand’s major corporations continuously acquired large supermarket chains such as Metro, Big C…  Singha has also become a strategic partner of Masan with investment value of 1.1 billion USD.

According to experts, there is a great competition in the business sector of Thailand and Japan when investing in Vietnam because Vietnam market has now fully matured and become more attractive. On the other hand, the market of Thailand and Japan has begun to saturate.

Especially, there is a wave of M&A of Thai investors in Vietnam in order to expand the market for the “Made in Thailand” products. While Thailand’s population is about 50 million, the size of Vietnam’s population is almost double – over 90 million people.

With many innovations in policy such as the Investment Law and the Enterprise Law, the process of international integration will create opportunities and new playing field for the M&A transactions to boom.

ANT Consulting is here to assist you from the outset; providing corporate intelligence, risk advisory, management consulting services that assist market entrance, and ensure efficient business start-up operation. 

We strive to save your cost by guiding you towards economical solutions that comply with local legislation and procedures. We support you through early logistic solutions and carry you through as your business grows.  We aim to bridge the gap between international best practices and local cultures and assist foreign companies and organizations entering Vietnam market to overcome commercial and regulatory issues.

We could be reached at email: ant@antconsult.vn or tel: +848 3520 2779 .  To learn more about us, please visit www.antconsult.vn

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Vietnam: Banking M&A Booming in 2015

The market for M&A transaction in Vietnam is expected to boom in 2015 with many M&A activities in banking industry.

According to experts, there will be new capital flowing into the M&A market of Vietnam with a total forecasting value up to 20 billion USD over the period from 2014 – 2018.

Particularly in 2014, according to an incomplete statistics of the M&A Forum team (MAF), the value of M&A in Vietnam reached 4.2 billion USD.

According to Prof. Dr. Christopher Kummer, Chairman of the Institute for Mergers, Acquisitions and Alliances (IMAA), Vietnam has made progress in the ranking of the global M&A activity when rising to the 20th position.

The main trend of the Vietnam M&A market during 2015 – 2016 and the following years has focused on a number of key industries such as retail, consumer goods, real estate, finance and banking.

Currently, investors from Japan, South Korea and Thailand are the main customers who acquire projects, enterprises of Vietnam.

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M&A Services in Vietnam

M&A Trend in Vietnam

The foreign investors have been taking a number of corporate intelligence  research, background check and M&A due diligence in Vietnam before taking a closer look into the targets for M&A.  The investors from Thailand, Singapore focus mainly on the field of consumer goods and retail; investors from Japan, South Korea eye real estate and industrial real estate projects.

In fact, there have been cooperations between Vietnam companies with foreign investors as Hoang Quan Real Estate has received capital from GEM investment fund (US); Sao Mai An Giang group is also negotiating for capital grants from a major investment fund from US; Nam Long, Thanh Dong, An Gia, Khang Dien… cooperate with Japan; Sacomreal and Thanh Thanh Cong Group cooperate with Gamuda Land from Malaysia.

Vietnam Policy Open-up Creating Positive Impact

The changing in the policies recently had a tremendous impact on the investment and business activities of enterprises, particularly place strong impact on the M&A activity in the future.

For example, many important laws aimed at innovating and improving the economic institutions such as the Public Investment Law, the Investment Law (revised), Business Law (revised), the Law on management and use of state capital in production – business, Housing Law (revised), Law on Real Estate Business (revised), which allows to ease room for foreign investors in many sectors are contributing to improve the legal environment for business investment activities in general and M&A market in particular.

Vietnam Bank Restructuring

Besides, the process of restructuring the commercial banking system and divest non-core investments of the state-owned enterprises under the policy of the Government is also contributing to make the M&A market more diverse.

2015 is the year to thoroughly handle weak banks, gather small banks to form large-scale banks, meet the international standards.

It is clear that the M&A activities are just starting to heat up since 2007, when Vietnam joined the World Trade Organization (WTO). The value of M&A increased gradually until 2012, a record year with more than 4.1 billion USD of total value.

Entering 2014, with stronger action by the Government on the process of equitization of state-owned enterprises, reform some laws related to business and investment, improve administrative procedures and keep a stable macroeconomic environment, along with better growth rate have encourage domestic and foreign enterprises to acquire.

The year of 2014 was a year marking the revival of M&A transactions in Vietnam, after this operation dropped more than 50% in value in 2013. According to statistics, Vietnam has witnessed 313 M&A transactions in 2014, increase slightly compared with the previous year. This figure includes transaction between Vietnam companies with each other, foreign enterprises purchase domestic enterprises and Vietnam enterprises go to buy assets abroad.

According to the State Bank of Vietnam (SBV), in 2015, there will be approximately 6 M&A transactions. Hence, not only large banks but small banks are actively looking for M&A partners in order to survive.

The first M&A transaction will be the merger of Southern in Sacombank, then asking many other weak banks to merge with large banks. With the goal that in 2015 the banking industry will have the 2nd restructuring, consolidating of banks to form the large-scale bank with international standards.

Currently, the SBV has approved the merger of Sacombank and Southern Bank, Maritime Bank and Mekong Bank. Although the conversion rate between Southern Bank shares into shares of Sacombank or Mekong Bank to Maritime Bank is still unknown, but two banks have a large difference in size and profitability especially in recent years.

Other M&A transaction in banking industry: Vietcombank will merge with Saigonbank. Vietcombank is currently the largest shareholder of Saigonbank with stake holding of over 8.2%.

In addition, BIDV will also merge with MHB. VietinBank merges with a small bank, which had been identified as PGBank.

In recent days, information about Nam A Bank will merge with another bank with a larger scale is interested by the market. The policy and direction of SBV to accelerate the restructuring in banking industry is crucial, therefore in the future, M&A transactions in the financial – banking sector will be very busy.

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