M&A (merger and acquisition) activities in Vietnam were forecast tocontinue rising this year, particularly in the partnership with Japan,heard a seminar on attracting IPO and M&A partnerships betweenJapanese and Vietnamese enterprises held on Mar. 6 in Hanoi.
Althoughthe total number of M&A deals decreased from over 340 in 2010 toaround 250 last year, the total value of the deals more than doubledduring the period, increasing from 1.7 billion USD in 2010 to 4 billionUSD in 2011, said Nguyen Anh Phong, deputy general director of the HaNoi Stock Exchange.
Last year saw an increase in the interests ofJapanese companies in Vietnam's M&A market, with 23 percent oftotal deal value coming from Japan, Phong said, citing remarkable dealsreached last year including Mizuho bank purchasing a 15 percent stakeworth 543.8 billion USD in Vietcombank and Unicharm buying a 95 percentstake worth 125 million USD in Diana Vietnam.
Phong revealed finance andconsumer goods were the two most appealing sectors to Japaneseenterprises, with 50 percent of the deals struck in these sectors.
Directorof the New Listing Department of the Tokyo Stock Exchange, YasuyukiKonuma, said Japan was the world's largest investor and its wealthyindividual investors were keen on investing in Asian stocks.
"Japanesehousehold assets are the highest in the world at 19.48 billion USD, ofwhich cash/deposits in banks account for 55 percent," Yasuyuki said,emphasising that the Japanese government was encouraging people toinvest their savings.
"Investment in Vietnamese companies is the highest since 2009."
ToshifumiIwaguchi, director of RECOF Corporation, said decreasing population anddomestic demand were driving Japanese companies to invest abroad.
Recentstatistics demonstrated that the number of Japan-outbound M&A dealswas rapidly increasing, with Japanese enterprises being highlyinterested in M&As in Asia, Toshifumi said, noting the number ofoutbound M&A deals with Asian companies last year rising 41 percentyear-on-year.
"Vietnam ranks third after China and India as apossible investment destination through M&As," Toshifumi said,explaining strong interest in Vietnam was based on its market growth andworkforce.
Some Japanese companies preferred entering theVietnamese market by co-operating with Vietnamese partners with existingmarket shares and knowledge, he said, adding while some Japanese firmstended to buy minority stakes to limit their investment risks, otherschose to acquire majority stakes to take control of the target company.
Toshifumisaid Japanese firms targeted a wide range of sectors but the percentagein the manufacturing sector had been steadily increasing, from 10percent in 2007 to 39 percent last year.
Welcoming Japanesecapital investment, Deputy Minister of Planning and Investment Dang HuyDong said seeking capital to stabilise and expand business was now themost important issue to Vietnamese companies, and M&As were aneffective channel to raise capital.
"The economic relationshipbetween Vietnam and Japan has been increasing strongly in recent yearsand Vietnam expects the two countries' co-operation in the M&Aindustry will also be strengthened in the future," Dong said.
Dongsaid that recent M&A deals were still impulsive and unprofessionaldue to the lack of an appropriate legal framework, industry expertise,human resources and professional consultancy. Therefore, in order toallow M&A deals to develop and protect the rights of participatingcompanies, authorities would draw up M&A regulations as well aspromote co-operation between management bodies and enterprises toprovide information and training in new business activities.-VNA