Illustrative image (Source: internet) Hanoi (VNS/VNA) - The value of the merger and acquisition (M&A) deals in Vietnamreached 5.43 billion USD in the first seven months of this year, according todata released on July 23 by the AVM Vietnam, a co-organiser of the VietnamM&A Forum 2019.
Thefigure included the 885 million USD equity purchase of Korean KEB HANA Bank for15 percent stake of the Bank for Investment and Development of Vietnam (BIDV)announced on July 22.
Since2018, Vietnam has emerged as a big M&A market in the Southeast Asian regionwith many big value deals. Total M&A value last year reached 7.64 billionUSD, down 25 percent compared to 2017’s record value of 10.2 billion USD.However, if excluding the 5 billion USD deal of ThaiBev’s purchase of Sabeco’sequity in 2017, the 2018’s M&A value still increased by 41.4 percentyear-on-year.
Dang XuanMinh, General Director of AVM Vietnam, said foreign investors were seekingopportunities in the consumer goods manufacturing and real estate industries inVietnam to capitalise on the huge market of more than 96 million people.
“At aBloomberg’s investment conference in Thailand recently, many foreign investorsexpressed their keen interest in Vietnam’s market and want to seekopportunities here,” Minh told the meeting to introduce the Vietnam M&AForum 2019 on July 23.
Theirinterested industries included consumer goods, retail, real estate, educationand logistics, Minh said, but also pointed out the obstacles which mayhinder foreign investment, including slow state-owned enterprise (SOE)equitisation process, high State holding ratio in equitised companies,overvalued assets and the lack of transparency and English proficiency inVietnamese firms.
Minhpredicted the M&A value could reach 6.7 billion USD by year-end, but leftopen the possibility of higher value if appearing big deals like KEB HANA Bankin BIDV.
MichaelDC Choi, Deputy General Director of the Korea Trade Investment Promotion Agency(KOTRA) told Vietnam News valuation was one of the biggestobstacles to seek investment in small companies in Vietnam.
“There’sno clear standard to value the company properly. You have to trust and take allrisks in the deal,” he said.
After adecade of strong growth, Vietnam’s M&A market value reached nearly 50billion USD and is predicted to enter a new era with various opportunities.
DeputyMinister of Planning and Investment Vo Thanh Thong said Vietnam was promotingM&A activities in tandem with SOE equitisation in various sectors liketransportation, infrastructure, food, agriculture, telecommunications, trade,services and tourism.
Thongsaid recent new policies such as the draft amendments and supplementations tosome important laws (the Law on Investment, Law on Enterprises and Law onSecurities), the draft resolution on attracting new-generation foreigninvestment and newly-signed free trade agreements would help lure moreinvestment, including M&A deals.
He saidthe Politburo for the first time would issue a separate resolution onattracting foreign investment in the future.
Meanwhile,Le Trong Minh, Editor-in-Chief of Vietnam Investment Review, the eventorganiser, said Vietnam also faced challenges from domestic and internationalfactors such as rising trade tension in the world, slow equitisation anddivestment of state-owned enterprise and modest local market value.
The 11th annualVietnam M&A Forum 2019 themed “Going for breakthrough” will take place inGEM Conference Centre in HCM City on August 6. The forum would assess theM&A trends in the next few years, analyse new capital flows, opportunitiesand driving force for M&A in Vietnam, Minh said.-VNS/VNA
VNA
