Want to be in the loop?
subscribe to
our notification
Business News
M&A ON CUSP OF POST-COVID-19 SURGE
As global mergers and acquisitions activity continues to rebound following a pandemic-fuelled freeze, Vietnam is expected to benefit from the growth of deal-making.
According to the first-quarter global review by Refinitiv, a global provider of financial market data, mergers and acquisitions (M&A) activity hit $1.3 trillion globally in the period, an increase of 94 per cent compared to the same period in 2020. Cross-border activity more than doubled and was the strongest opening quarter for cross-border deals on record, with the technology, financial, and industrial sectors accounting for almost half of cross-border M&A.
Meanwhile, an EY Global Capital Confidence Barometer survey of more than 2,400 executives in 52 countries found that over half of corporates are looking to actively pursue M&A in the next 12 months – the highest since 2012 and beating the 11-year average of 44 per cent. In particular, almost half (46 per cent) of corporates expect that Southeast Asia will generate the most growth prospects and opportunities for their organisation in the next three years.
Some big deals in 2020 include the 80 per cent acquisition of Vinhomes’ Grand Park project by Mitsubishi Corporation and Nomura Real Estate; the purchase of 36 per cent stake in construction firm Ecoba by Japan’s Haseko Corporation; and SK Group’s acquisition of 25 per cent stake at pharma group Imexpharm.
Du Vinh Tran, Strategy and Transactions leader at EY Indochina, said that Vietnam is a relatively hot destination for M&A in Southeast Asia. He noted that the robust growth is credited to the government in terms of controlling macro-stability with low interest rates and stable exchange rates. Vietnam’s economy has also transformed strongly for the past 30-plus years. Therefore, the growing trend of M&A is expected to continue into the future.
Last week, SK Group made another big splash by acquiring part of VinCommerce. SK and Masan Group announced the signing of definitive agreements for SK’s acquisition of a 16.26 per cent in VinCommerce for a total cash consideration of $410 million.
Commenting on the deal, Woncheol Park, representative director of SK Southeast Asia Investment said, “We have a strong belief in the potential of Vietnam’s on/off-line retail sector and expect VinCommerce to play a vital role in its modernisation.”
In March, Malaysian-backed TenagaNasional Bhd.’s (TNB) wholly-owned subsidiary TNB Renewables Sdn., Bhd. acquired 39 per cent in a 21.6MW project comprising of five rooftop solar plants in Vietnam from Singapore’s Sunseap Group. This acquisition will serve as a beachhead for TNB to establish a local presence in Vietnam and expand into the rapidly-growing renewable energy and utilities market.
The previous month, SCG Packaging Public Co., Ltd. (SCGP), a subsidiary of Siam City Cement, scooped up a 70 per cent stake in Duy Tan Plastics Manufacturing Corporation. The move is an expansion of SCGP’s rigid plastic packaging business, so it can now provide its customers in Vietnam with a full range of packing products, both polymer and paper-based.
At the start of the year, Singapore’s UOB Asset Management completed the acquisition of all shares of VAM Vietnam Fund Management, according to a statement from the Singaporean asset manager. The deal size was estimated to be nearly $5 million, and the Ho Chi Minh City-based firm will be renamed UOB Asset Management (Vietnam) Fund Management, subject to regulatory approval.
Experts said regulatory changes such as those made to investment-related laws from the start of this year may make the investment procedure somewhat easier. However, the most effective way of stimulating investments from Japan would be to simplify the border entry process for business travellers, as long as the pandemic situation will allow. On the side of the Japanese, it should make every effort to contain the pandemic in order to be allowed to be back in Vietnam as investors.
Meanwhile, Tran Phuong Lan, head of Competition Supervision and Management under the Vietnam Competition and Consumer Authority, cited a study by Euromonitor International showing that Vietnam is the second-most robust M&A market in the world following the US. In the coming years, she said, M&A activity will continue to be strong while at the same time, it also poses risks for potential medium- and large-sized enterprises with specific market share and roles to be taken over.
To better manage M&A activities, she suggested that Vietnam needs a legal framework encouraging more Vietnamese firms to join the M&A market as well as develop policy for commercial and investment banks to support such activities by local companies.
“Vietnam should also strengthen the supervision and control of economic concentration in the fast-growing sectors of textiles and garments, footwear, and electronics for foreign transactions,” she said. “The country needs to establish a frequent consultation mechanism between the Ministry of Planning and Investment and the Ministry of Industry and Trade to build a database on M&A deals with a view to ensure national interests without causing anti-competitive effects in the market.”
Source: VIR
Related News
![Card image cap](/uploads/news/Eco2.jpg)
GOV’T UNVEILS ACTION PLAN TO ACCELERATE INDUSTRIALISATION
Vietnam aspires to become among the top three industrial powerhouses in ASEAN, with the industrial sector contributing over 40 per cent to GDP. The manufacturing and processing sector is expected to account for around 30 per cent of GDP, with a strong emphasis on high-tech products aiming for over 45 per cent of the sector's value. To further drive the economy, the service sector is projected to contribute over 50 per cent to GDP, with tourism alone generating 14-15 per cent.
![Card image cap](/uploads/news/economic.jpg)
VIETNAM’S H1 ECONOMIC GROWTH QUITE IMPRESSIVE: ADB COUNTRY DIRECTOR
Country Director of the Asian Development Bank (ADB) for Vietnam Shantanu Chakraborty has expressed his impression of the Southeast Asian nation’s economic growth of 6.4 per cent in the first half of this year. The growth was mainly driven by strong trade recovery, where export grew by 14.5 per cent and import by 17 per cent over last year, he told the Vietnam News Agency. However, he said, the domestic segment remained sluggish.
![Card image cap](/uploads/news/Infrastructure13.jpg)
REAL ESTATE FIRMS AGGRESSIVELY RESTRUCTURING BOND DEBT
From the start of 2024 to July 5, the market saw 133 private placements and ten bond public offerings, totalling over VNĐ140 trillion. 65.6 per cent of this value was from the banking sector, while real estate bonds accounted for only 24.6 per cent, or over VNĐ34.5 trillion.
![Card image cap](/uploads/Logo/Cathay%20%281%29.jpg)
ONE-TIME OFFER: COMPLEMENTARY CATHAY PACIFIC LOUNGE PASS
Begin your trip on the right note in Cathay Pacific’s first-ever ferry lounge, located at Shenzhen’s Shekou Cruise home port. Situated at the end of the pier, the ferry lounge offers a breathtaking 270-degree view of the sea. You can immerse yourself in sheer luxury and revel in the panoramic beauty. Catch a glimpse of Hong Kong in the distance.
![Card image cap](/uploads/news/Industrial%20Zone.jpg)
VIỆT NAM TARGETS FULL MOBILE BROADBAND COVERAGE ON HIGHWAYS, INDUSTRIAL ZONES BY 2025
By 2025, Việt Nam aims to achieve one hundred per cent mobile broadband coverage on all national highways, expressways and railways under a plan to enhance the quality of Việt Nam’s mobile telecommunications network by 2025, which has been approved by the Ministry of Information and Communications (MIC).
![Card image cap](/uploads/news/Investment6.jpg)
VIETNAM ONE OF FASTEST-GROWING E-COMMERCE MARKETS IN SOUTHEAST ASIA
The report released on July 16 highlighted that the total GMV of Southeast Asia’s eight leading e-commerce platforms rose to $114.6 billion in 2023, up 15 per cent from 2022. The key drivers for the region's e-commerce GMV expansion in 2023 are Vietnam and Thailand, growing 52.9 per cent and 34.1 per cent on-year, respectively.