Foreign investors still dominate Vietnam's M&A market

ABO/VNA - Many Vietnamese businesses conducted successful mergers and acquisitions (M&As) in 2019 and 2020 but the market was still led by foreign investors, the Vietnam M&A Forum in HCM City on November 24 heard.
Outstanding M&A deals since 2019 include those between KEB Hana Bank and BIDV, VinaCapital and the Thu Cuc Hospital, Masan Consumer and VinCommerce & VinEco, the Stark Corporation and Thipha Cables & Dovina, FWWD and VCLI, and Vinamilk and GTN.
Most deals between June 2019 and October 2020 were in the real estate, finance and banking, industry, and retail sectors, with major M&As also seen in logistics, agriculture, pharmaceuticals and healthcare, and construction.
M&As by Vietnamese enterprises accounted for one-third of the total value during the period.

At the Vietnam M&A Forum 2020.

Foreign investors, however, especially those from Japan, the Republic of Korea, Thailand, and Singapore, still dominate the local M&A market.
For example, 19 deals between Japanese investors and Vietnamese companies were announced in September this year alone. Thai investors, meanwhile, continue to carry out M&As in the manufacturing and processing sector.
Deputy Minister of Planning and Investment Tran Quoc Phuong said M&As have become an effective channel for capital mobilisation and helped accelerate growth model reform, economic restructuring, and the diversification of business ownership forms.
They are also a “shortcut” for foreign businesses to enter or expand their presence in Vietnam, he said.
Some experts said the equitisation of State-owned enterprises and the divestment of State capital from enterprises have not been carried out on schedule since 2019. COVID-19 and the new normal have also affected M&A activities around the world, including in Vietnam.
The local M&A market has been growing strongly over the last decade, with thousands of deals worth nearly 50 billion USD in total.
Market researchers Euromonitor International forecast that M&A activities in the country will bounce back from mid-2021 and help the market return to around 5 billion USD.
Meanwhile, investors and researchers have issued different predictions for the market next year, according to a recent survey by the forum’s research group and the Corporate Investment and M&A Centre.
Twenty-four percent of interviewees projected a 2021 market value of 3 billion USD, 42 percent 3-4 billion USD, 26 percent 4-5 billion USD, and 8 percent more than 5 billion USD.
Consumer goods, retail, real estate, industry, and agriculture will remain magnets for M&As in 2021. Telecoms, energy, infrastructure, pharmaceuticals, and education are also expected to contribute substantially now and in the years to come.
Investors from Asian countries, including the Republic of Korea, Japan, Thailand, and Singapore, are forecast to maintain their dominance, while private groups will provide momentum for the market’s recovery in 2021 and subsequent years.

(Source: VNA)