At the meeting (Photo: VNA) Hanoi (VNS/VNA) — Vietnam’s merger and acquisition (M&A) market isconsidered the least affected among the Southeast Asian countries since theonset of the COVID-19 pandemic, but in the new normal state, M&A value isexpected to fall substantially to just 3.5 billion USD in 2020.
This number is only 48.6 percentof 2019’s value of 7.2 billion USD.
The pandemic continues to rageand has enormous impact on the global market, taking its toll on the globalM&A market.
Data by MergerMarketshowed both deal volume and value declined in the first half of this year, with6,938 deals worth 901.6 million USD, down 32 percent in volume and 53 percentin value year-on-year.
Speaking at the press meetingon November 5 to introduce the M&A Vietnam Forum 2020, Le Trong Minh,editor-in-chief of Dau Tu (Investment) newspaper and head of theorganising committee, said Vietnam’s M&A market is entering a new stage –the new normal – which can see new opportunities.
After more than a decade ofstrong growth with thousands of transactions and total value of nearly 50billion USD, M&A activities have proven an efficient channel of raisingcapital, contributing to Vietnam’s economic restructuring and State-ownedenterprises equitisation process.
However, Vietnam is emerging asa safe and attractive investment destination after successfully controlling theCOVID-19 pandemic and many opportunities open up, Minh said, emphasising thepossible movements of capital out of big but unsafe markets.
TheM&A wave will be delayed as buyers and sellers cannot meet due to thepandemic, making the deal take longer than expected. Meanwhile, domesticenterprises are trying to find ways to adapt and change business-investmentstrategies, Minh said.
According to Dang Xuan Minh,chairman of AVM Vietnam, the COVID-19 pandemic and the new normal have driveninvestors and businesses to adjust their strategies, and increase restructuringactivities.
Marketinsiders predicted M&A value in Vietnam may reach 3-4 billion USD this yearbut he said the number could be higher if one or two high-value deals are inked.
Data by AVM showed M&A activitiesare vigorous in the fields of real estate, finance-banking, industry, retail,logistics, agriculture and medical services. Foreign investors have alsodominated the market with companies coming from Japan, Republic of Korea,Thailand and Singapore.
However, Vietnamese companiesare actively participating in the market as buyers. In 2018, only 18 per centof deals were bought by Vietnamese firms while this rate during 2019-20 nearlydoubled to 33 per cent.
Investors and businesses in Vietnamstill believe in the resilience of the M&A market in the post-pandemicperiod. According to CMAC Academy’s forecast, the market could see a V-shapedrecovery in 2021-22 with value reaching 4.5-5 billion USD next year and 7billion USD by 2022.
With the theme “Upsurging inthe new normal”, M&A Vietnam Forum 2020, taking place on November 24 in HCMCity, is expected to attract 500 representatives of domestic and internationalbusiness and investment funds, who decide and make up 85 per cent of the valueof the deals taking place in Vietnam./.
