Vibrant M&As

On July 23, the Vietnam Investment Review in collaboration with AVM Company held the Press Conference on the 11th Mergers and Acquisitions (M&A) Forum in Vietnam, with the theme "Going for breakthrough". Many million-dollar deals have been detailed by the organizers, which shows the strong attraction of Vietnam's economy to foreign investors.

Enhancing the policy of attracting foreign investment

The 11th edition has attracted many domestic and foreign investors, said Deputy Minister of Planning and Investment Vo Thanh Thong. Over the past 10 years, the forum has contributed significantly to promoting foreign investment in Vietnam and connecting investment between domestic and foreign partners as well as proposing many useful recommendations for State agencies to complete the legal framework and policies on M&As. After 10 years, total M&A transactions have reached nearly US$50 billion. With new advantages and opportunities as Vietnam successfully signed the EVFTA agreement on June 30, 2019, M&A market is expected to have new impetus and stronger foreign investment.

Also according to Deputy Minister Vo Thanh Thong, to promote the economy more strongly, especially, creating maximum conditions for foreign investment sector, private enterprises to draw capital into domestic markets, the Ministry of Planning and Investment is finalizing and submitting to the Prime Minister the Project "Orientation to improve institutions and policies, improve the quality and efficiency of attracting and using foreign investment by 2030", often referred to as the new generation foreign investment attraction strategy. Based on this project, the Politburo will for the first time issue a separate resolution on attracting foreign investment in the coming time.

Many big M&A deals

According to Mr. Le Trong Minh, Editor-in-chief of Vietnam Investment Review, Head of the M&A Forum, said, the total value of M&A in Vietnam in 2018 reached US$7.64 billion, equaling 74.9% compared to 2017. In the first 6 months of 2019, the total value of announced M&A deals in Vietnam only reached US$1.9 billion (equal to 53% of the same period in 2018, US$3.55 billion). According to statistics of the Foreign Investment Agency, the value of foreign investors acquiring domestic shares reached US$2.64 billion.

Comments by economic experts show that foreign capital inflows into the Vietnamese market through the form of M&A of foreign investors still come from "four giants" including Korea, Hong Kong (China), Singapore and Japan. The most recent million-dollar deals are KEB HANA, which spent US$885 million acquiring a 15% stake in Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) on July 22, 2019. This is also considered the largest foreign M&A deal in the history of Vietnam's banking industry. Another big deal is SK Group spent US$1 billion buying into 6.1% of Vingroup in March 2019. Earlier, in September 2018, SK Group also spent US$470 million buying nearly 110 million treasury shares of Masan, equivalent to 9.5% of Masan's total voting shares. In addition, in 2018, Vingroup offered a US$400 million preferential stock to another Korean investor, Hanwha. Thus, only the deals between Korean investors and Vingroup amounted to US$2.41 billion, accounting for 25.64% of the total M&A value in the period July 2018 – July 2019.

Hong Kong also emerged as a giant in the billion-dollar M&A deals in Vietnam, which in the first 6 months of 2019 poured US$5.3 billion of investment into Vietnam. Special events are Beerco Limited (Hong Kong) spent US$3.85 billion to buy shares of Vietnam Beverage Co., Ltd. in Hanoi (100% foreign-owned enterprise directly owns more than 53% of Sabeco's capital)

According to Mr. Le Trong Minh, it is forecast that in 2019, the M&A value could reach US$6.7 billion, equal to 88.16% compared to 2018. The most exciting areas of M&A will be focusing on consumer goods, finance and real estate products, exploiting the potential market of more than 96 million people.

Anh Phuong