The merger and acquisition (M&A) scene in Vietnam has become increasingly active with more domestic firms setting up ties with global partners so their brands can reach global customers and develop domestically.(Photo: CFE)
Hanoi (VNA) – The merger andacquisition (M&A) scene in Vietnam has become increasingly active with moredomestic firms setting up ties with global partners so their brands can reachglobal customers and develop domestically.
According to the Ministry of Planning andInvestment, the value of M&A deals in the country hit 5.43 billion USDduring January-July, and the value will surge to 6.7 billion USD for the wholeyear.
The Southeast Asian country has become a topdestination for M&A deals for investors from the Republic of Korea (RoK),China’s Hong Kong, Singapore and Japan as Asian multinationals see the benefitsof a presence in one of the region’s fastest-growing economies.
Korean investors have dominated the M&A marketin the Southeast Asian country, the M&A Vietnam Forum (MAF)’s M&Areport showed.
Conglomerate SK Group signed a billion dollardeal with Vingroup in May to acquire 154.3 million primary shares in Vingroupand 51.4 million shares of the firm’s Vincommerce for 1 billion USD. After thetransaction, SK would own a 6 percent stake and become a strategic partner ofthe Vietnamese real estate, tech, retail and services giant.
The company also expressed its interest inpurchasing additional shares of the PetroVietnam Oil Corporation (PVOIL) afterbuying 3.55 million shares in the firm last year.
Furthermore, Shinhan Card bought PrudentialVietnam Finance Company Limited at 151 million USD, while Samsung SDS haspledged to purchase a 25 percent stake of CMC, Vietnam’s leading informationtechnology service provider.
Hong Kong was also a notable investor in thefirst half as it landed 5.3 billion USD in Vietnam. Particularly, Hong Kong’sBeerco Limited spent 3.85 billion USD on acquiring stake in Vietnam BeverageCo., Ltd, a local unit of Thai Beverage Public Co., Ltd.
As for Singaporean investors, they were thethird largest acquirers of M&A in Vietnam with deals worth 1.6 billion USDduring 2018-2019.
The Singaporean government’s GIC Private Limitedspent 1.3 billion USD to buy shares and provide debt instruments for Vingroup’sVinhomes in April. Last year, the fund acquired 51.9 million shares at MasanCorporation for 196 million USD.
Other renowned businesses in Singapore likeKeppel Land, CapitaLand and Mapletree have been involved in a variety ofM&A deals in the Vietnamese real estate market.
Meanwhile, many domestic firms have also usedM&A deals to consolidate their position in the domestic market. Outstandingdeals include Saigon Co.op buying 15 retail stores and an e-commerce platformof French-based Auchan Retail, Thaco buying 70 million shares of Hoang Anh GiaLai Agricultural Company (HNG) and Vingroup acquiring the Fivimart supermarketchain.
Deputy General Director of Saigon Co.op NguyenAnh Duc said the takeover of Auchan is a sound M&A deal as most Auchansupermarkets have good locations, and this helps Saigon Co.op expand.
Meanwhile, Managing Director for KPMG JapanMasahiro Kotaka, who has spent eight years coordinating with Japaneseenterprises on M&A deals in Vietnam, said M&A doesn’t just mean achange in ownership, but it also serves as a lever for firms to grow strongerand improve competitive capacity.
However, several experts pointed out challengesthat hamper M&A activities in Vietnam, including land use right afterM&A and valuation of State-owned enterprises for equitisation.
Deputy Minister of Planning and Investment VuDai Thang said the Vietnamese Government will study policies to boost M&Aactivities in the nation, saying the amended Business Law is expected toprotect the rights of shareholders and investors, as well as lure more foreigninvestment.-VNA
VNA
