White & Case: High-growth industries in Vietnam attract investors

High-growth industries in Vietnam continue to attract investor interest despite disruptions caused by COVID-19, according to White & Case, an international law firm that serves companies, governments and financial institutions based in the United States.

Vietnam’s mergers and acquisitions (M&A) activity is set for another robust year following 2020’s potent performance, White & Case wrote in an article posted on its website.

In the first three quarters of this year, deals with disclosed value totalled US$3 billion. 2021 is on track to overtake last year’s total figure of US$3.9 billion as there are three months left, it said.

According to the article, deal volume last year reached a record high since 2006, and this momentum continued into the first three quarters of this year with a total of 41 deals announced, equal to that of 2021’s figure.

As a result of these deals, the financial services sector attracted the highest deal value across all sectors during the first three quarters of this year, with a total of US$1.5 billion in deals with disclosed values recorded.

While financial services topped the value table, the industrials & chemicals sector generated the most deals of any sector with a total of seven deals announced during the first three quarters of the year.

Some sizable deals have been recorded within the electronics space such as the Republic of Korea's Sunji Electronic’s US$47.7 million acquisition of Bangjoo Hi-Tech, a manufacturer of electronic components and circuit boards.

Despite being affected by COVID-19, Vietnam continues to establish itself as a regional hub for electronics production. The country’s electronics exports have climbed from US$47.3 billion in 2015 to US$96.9 billion in 2019, ranking it 12th in the world.

A total of 20 deals were announced in the first three quarters of 2021, just three deals behind 2020’s record annual total. The healthy level of activity displays growing confidence among local firms as they look to beef up their capabilities and scale up operations.

The Asian Development Bank revised its forecast for GDP growth for Vietnam from 6.7% to 3.8% in September but the country’s economy still grow faster than the Southeast Asian regional average of 3.1%.

According to the article, the endurance of Vietnam’s dealmaking activity in the face of the ongoing COVID disruption displays both market resilience and an enduring appetite for local assets. Strong underlying fundamentals such as an educated, low-cost workforce, a burgeoning middle class, and a stable political climate will continue to make the country an attractive investment destination, it said.

High-growth industries such as consumer finance, electronics and retail will continue to attract attention from both strategic and private buyers, providing plenty of opportunities for dealmaking in the final quarter of the year. The easing of restrictions in October and the ongoing vaccination programme will only further boost the country’s recovery, said the article.

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Local mergers and acquisitions portray businesses’ confidence
Local mergers and acquisitions portray businesses’ confidence

The first three months of the year have witnessed more local businesses beef up their mergers and acquisitions efforts in order to scale up operations.

Local mergers and acquisitions portray businesses’ confidence

Local mergers and acquisitions portray businesses’ confidence

The first three months of the year have witnessed more local businesses beef up their mergers and acquisitions efforts in order to scale up operations.