Vietnam's merger and acquisition (M&A) market is seeking a big push as signs of a deceleration have crept up this year (Source: tinnhanhchungkhoan.vn)Hanoi (VNA) - Vietnam’s merger and acquisition(M&A) market is seeking a big push as signs of a deceleration have crept upthis year.
M&Adeals in Vietnam hit an all-time record of 5.8 billion USD in 2016, a growth of11.92 per cent compared to 2015’s value, according to a report released at apress meeting to launch the M&A Forum 2017 on July 20.
However,the market has seen a slowdown since the latter half of last year with fewerstellar deals. The total value of M&A deals reached just 1.1 billion USD inthe first quarter of this year, down 24.4 per cent year-on-year.
Accordingto the latest research by the M&A Forum 2017, the domestic M&A marketwill likely not surpass 2016’s peak without a breakthrough.
“Thiswill require a big push from the Government and businesses to boost M&Aactivities to grow stronger in both quantity and quality,” said Le Trong Minh,editor-in-chief of Vietnam Investment Review, organisers of the M&A Forum2017, scheduled to be held in HCM City on August 10.
M&Aactivities in 2017 will face challenges of rising competition in drawingforeign capital between Vietnam and regional countries and a slowdown inState-owned Enterprises (SOEs)’ equitisation process, as well as the lowquality of Vietnamese companies and small scale of the economy.
TheGovernment’s latest report showed that the progress of SOE equitisation has notkept up with the Government’s and investors’ expectations.
Only52 SOEs were equitised in 2016, equivalent to 25 percent of the number recordedin 2015. In the first half of this year, the number was just 20, down 24 percentfrom the same period last year.
Vietnam’sM&A market value is small in comparison with other ASEAN countries such asSingapore with total M&A value in 2016 hitting 62.3 billion USD; Indonesia,Thailand and Malaysia around 11-16 billion USD.
Interms of deal values, most M&A deals in Vietnam were small with over 64 percentvalued below 20 million USD.
Foreigncapital continued to play a dominant role in executing stellar deals with sizesof between 20-100 million USD. For example, Thailand’s Central Group spent 1.05billion USD to acquire Big C Vietnam from the Casino Group, and TCC Holdingspurchased the entire chain of Metro Vietnam Cash & Carry for 800 millionUSD.
Overseasinvestors accounted for roughly 77 percent of the total value of M&A dealsin Vietnam in 2016. Asian companies continued to lead the market in terms ofthe number and value of the deals with Thailand, Singapore, the Republic of Korea,Japan, China and Hong Kong being the top five buyers in Vietnam.
Retail,consumer goods and real estate sectors were the most attractive ones forM&A activities, especially deals in the retail sector accounting for 38.5percent of the total value in 2016.
Theworking group of the M&A Forum 2017 provides two scenarios for M&Aactivities in 2017, of which the conservative ratio predicts the total value ofM&A deals to reach around 5 billion USD this year, down 14 percent from2016.
Inthe optimistic scenario with a breakthrough from SOEs equitisation, total valuecould reach 6.2-6.5 billion USD or higher, equivalent to a growth of 6.5-10 percent.
Statedivestments from big companies such as Sai Gon Beer-Alcohol-Beverage Corp(Sabeco), Hanoi Beer Alcohol and Beverage JSC (Habeco), Petrolimex, Vinamilkand MobiFone are on the investment radar for both foreign and domesticinvestors.
In2017-18, M&A deals will continue to focus on retail, consumer goods andreal estate. In addition, telecommunications, energy and infrastructure areexpected to emerge and see some big deals.
VietnamM&A forum 2017, an annual event of mergers and acquisitions for companiesand investors from Vietnam and other countries, will take place at GEM ConferenceCentre in HCM City on August 10.
Theevent has been co-organised by Vietnam Investment Review (VIR) and AVM Vietnamsince 2009 under the sponsorship of the Ministry of Planning and Investment.Under the theme “Seeking a big push”, the forum will be the platform toexchange suggestions, introduce opportunities and share experiences to create abreakthrough in the market this year.
About30 international and Vietnamese guest speakers and 500 senior leaders frominvestment funds, Vietnamese and international corporations are expected toparticipate in the event.-VNA
M&Adeals in Vietnam hit an all-time record of 5.8 billion USD in 2016, a growth of11.92 per cent compared to 2015’s value, according to a report released at apress meeting to launch the M&A Forum 2017 on July 20.
However,the market has seen a slowdown since the latter half of last year with fewerstellar deals. The total value of M&A deals reached just 1.1 billion USD inthe first quarter of this year, down 24.4 per cent year-on-year.
Accordingto the latest research by the M&A Forum 2017, the domestic M&A marketwill likely not surpass 2016’s peak without a breakthrough.
“Thiswill require a big push from the Government and businesses to boost M&Aactivities to grow stronger in both quantity and quality,” said Le Trong Minh,editor-in-chief of Vietnam Investment Review, organisers of the M&A Forum2017, scheduled to be held in HCM City on August 10.
M&Aactivities in 2017 will face challenges of rising competition in drawingforeign capital between Vietnam and regional countries and a slowdown inState-owned Enterprises (SOEs)’ equitisation process, as well as the lowquality of Vietnamese companies and small scale of the economy.
TheGovernment’s latest report showed that the progress of SOE equitisation has notkept up with the Government’s and investors’ expectations.
Only52 SOEs were equitised in 2016, equivalent to 25 percent of the number recordedin 2015. In the first half of this year, the number was just 20, down 24 percentfrom the same period last year.
Vietnam’sM&A market value is small in comparison with other ASEAN countries such asSingapore with total M&A value in 2016 hitting 62.3 billion USD; Indonesia,Thailand and Malaysia around 11-16 billion USD.
Interms of deal values, most M&A deals in Vietnam were small with over 64 percentvalued below 20 million USD.
Foreigncapital continued to play a dominant role in executing stellar deals with sizesof between 20-100 million USD. For example, Thailand’s Central Group spent 1.05billion USD to acquire Big C Vietnam from the Casino Group, and TCC Holdingspurchased the entire chain of Metro Vietnam Cash & Carry for 800 millionUSD.
Overseasinvestors accounted for roughly 77 percent of the total value of M&A dealsin Vietnam in 2016. Asian companies continued to lead the market in terms ofthe number and value of the deals with Thailand, Singapore, the Republic of Korea,Japan, China and Hong Kong being the top five buyers in Vietnam.
Retail,consumer goods and real estate sectors were the most attractive ones forM&A activities, especially deals in the retail sector accounting for 38.5percent of the total value in 2016.
Theworking group of the M&A Forum 2017 provides two scenarios for M&Aactivities in 2017, of which the conservative ratio predicts the total value ofM&A deals to reach around 5 billion USD this year, down 14 percent from2016.
Inthe optimistic scenario with a breakthrough from SOEs equitisation, total valuecould reach 6.2-6.5 billion USD or higher, equivalent to a growth of 6.5-10 percent.
Statedivestments from big companies such as Sai Gon Beer-Alcohol-Beverage Corp(Sabeco), Hanoi Beer Alcohol and Beverage JSC (Habeco), Petrolimex, Vinamilkand MobiFone are on the investment radar for both foreign and domesticinvestors.
In2017-18, M&A deals will continue to focus on retail, consumer goods andreal estate. In addition, telecommunications, energy and infrastructure areexpected to emerge and see some big deals.
VietnamM&A forum 2017, an annual event of mergers and acquisitions for companiesand investors from Vietnam and other countries, will take place at GEM ConferenceCentre in HCM City on August 10.
Theevent has been co-organised by Vietnam Investment Review (VIR) and AVM Vietnamsince 2009 under the sponsorship of the Ministry of Planning and Investment.Under the theme “Seeking a big push”, the forum will be the platform toexchange suggestions, introduce opportunities and share experiences to create abreakthrough in the market this year.
About30 international and Vietnamese guest speakers and 500 senior leaders frominvestment funds, Vietnamese and international corporations are expected toparticipate in the event.-VNA
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