Favourable policies needed to lure investments via M&A deals: Experts
Compared to three years ago, domestic investors outperformed on the merger and acquisition (M&A) market, but the most valuable deals still belonged to foreign investors, heard a conference on M&A trends in Ho Chi Minh City on March 12.
The event was organised by the Business Association of High-Quality Vietnamese Products in coordination with relevant units.
According to the Vietnam M&A Transformation report by KPMG, the total value of M&A transactions in Vietnam reached US$4.4 billion in the first ten months of 2023, involving over 260 deals. The average deal value stood at US$54.5 million.
Nguyen Tuan Anh, a lecturer at RMIT University Vietnam, Saigon South Campus, said consumer goods and non-essential goods among the potential industries in Vietnam's M&A market. Investors will target businesses with stable and long-term product investment strategies including agriculture and food with the basic foundation of the economy - food production and distribution, he added.
To create an open environment for the M&A market and attract foreign investments, experts recommended that it is necessary to promulgate more favourable policies for divestment activities, along with shortening the duration for a M&A deal.
It should be noted that environmental, social, governance (ESG) trends will increase and become one of the key factors driving M&A deals. Statistics showed that every year, at least two out of five deals require ESG during the appraisal process.
Regarding the M&A trend, Huynh Thanh Binh Minh, Director of TAEL Partners Investment Fund in Vietnam, pointed out that completing a capital call and carrying out an M&A deal involve the engagement of many units. Businesses need to proactively evaluate the company's strengths and build a management strategy that has the ability to attract capital, she said, adding that it is necessary for them to restructure corporate governance activities, business strategies, market orientations and brand building.
With such favourable conditions as signing many free trade agreements, a large population and stable geopolitics, Vietnam is a potential M&A market. However, insiders said Vietnam must have rational policies and mechanisms to attract capital in various fields through M&A deals as the capital flows into Southeast Asian countries are the same.
