Vietnamese M&A activities heating up

Statistics show that the total value of M&A deals was estimated at US$5.2 billion in 2015 and US$3 billion in the first six months of 2016. The figure is expected to surpass US$6 billion for the whole of 2016 and continue to edge up in the following years.

Many M&A transactions have been seen in real estate, consumer goods and food and beverage production. 60 percent of the total transactions were between domestic enterprises with each deal worth US$5 million on average.

M&A deals by foreign investors are worth from tens of millions of dollars to hundreds of millions of dollars.

According to Chairman of the Hanoi Supermarket Association Vu Vinh Phu, M&As aim to enlarge and diversify business portfolios of the purchasers while allowing sellers to recover capital.

There had been changes in the ownership of large supermarkets, such as Thai Central Group buying the Big C supermarket chain, Phu said, adding that this is a positive deal which will drive market development.

The Ministry of Planning and Investment said that there is reason for optimisim for M&A activities in the energy, banking, infrastructure, hotels and office sectors.

The ministry noted that the 8th Vietnam M&A Forum 2016, set for Ho Chi Minh in August, will feature large enterprises, securities companies and development capital funds.

Their attendance shows that M&As are an efficient capital mobilising channel, contributing to adding more capital to the economy while enhancing business efficiency, said Deputy Minister Pham Huy Dong. 

M&As are also a way for foreign enterprises to quickly enter the Vietnamese market and therefore the ASEAN market.

In a bid to promote M&A activities in the country, relevant management agencies need to fulfill legal regulations, particularly accounting, insurance and legal service issues. Domestic enterprises need to show themselves as “inviting” commodities for financial investors through exact and prompt financial statements.