Experts and investors see another booming year for M&A (mergers andacquisitions) in 2015 which is expected to beat the record of nearly 5billion USD in value seen in 2012.
ASEAN has been rising as anattractive destination for foreign investors in recent years. This isnot only a huge consumer market with around 600 million people but alsobeing favoured for its cheap and young labour market.
Furthermore,the establishment of the ASEAN Economic Community by the end of thisyear will create comprehensive economic integration among the 10 membercountries. Vietnam is forecast to cash in on the movement of capitalflows in the region.
The country is widely believed to be readyfor a second wave of M&A, with the total value of transactionsexpected to reach 20 billion USD between 2014 and 2018.
Accordingto a research of the M&A Forum 2015, total value of such deals inVietnam touched almost 4 billion USD in 2014, an increase of about 20percent over the previous year.
The average value of atransaction also rose from 5 – 8 million USD three years ago, to around11 million USD in 2014. Most of the big deals involved foreigninvestments ranging from 20 million USD to more than 100 million USD.
Retail was still the most eye-catching sector with 36 percent of total value, followed by consumer products at 21 percent.
Speakingat a press conference on July 16 while introducing the Vietnam M&AForum 2015 themed "Countdown to the Next Market Boom" slated for August 6in HCM City, Nguyen Anh Tuan, editor-in-chief of the Vietnam InvestmentReview, the organiser of the forum, said M&A activities in Viet Namthis year and in the next five years would be happening in thefavourable environment of a recovering economy.
Tuan said thecountry was speeding up its institutional reform and the legal frameworkfor M&A was being completed with a series of important lawsrelating to investment activities having been amended such as the Law onInvestment, Law on Enterprises, Law on Housing and Law on Real EstateBusiness.
The recent issue of the Decree 60 which allows higherforeign ownership limit in listed companies has also been highlyappreciated by both domestic and foreign investor communities.
Theprocess of bank restructuring and non-core divestment as well asacceleration of State-owned enterprises with a large number ofcorporations and large-scale enterprises being equitised this year andin the next five years would open up more opportunities for biggerM&A deals, he added.
According to Dang Xuan Minh, CEO of AVMVietnam, co-organiser of the event, the rise of the private sector inVietnam taking M&A as a strategy crucial to ensuring sustainablegrowth has added more dynamics to Vietnam's M&A.
Minhreferred to a deal by VinGroup which has spent 560 billion VND (25.7million USD) to buy Ocean Mart to develop its own supermarket chainVinMart.
He also noticed a new trend of rising investments fromThailand into Vietnam last year, which was different with the dominanceof Japanese companies in M&A deals in 2012 and 2013.
Minhsaid many Thai companies were seeking to tap Vietnamese consumer marketswhich could be seen on their M&A deals, such as PowerBuy which tookover Vietnamese electronics chain Nguyen Kim, and Berli Jucker PublicCo Ltd (BJC) which acquired Metro's business in Vietnam.
Accordingto Masakata Yoshida, CEO of Recof Corp, a Japanese M&A advisoryservice provider, deeper integration of the ASEAN community will bringboth opportunities and challenges for Vietnam.
While the countrycould penetrate deeper in other ASEAN markets, it would be also exposedto more fierce competition for foreign investments. The removal oftariffs among these countries could stimulate the change of productionbases of foreign companies, including Japanese ones, to other ASEANcountries, Yoshida said.
However, with a growing middle-class inVietnam, Yoshida said many Japanese medium and small-sized companiesshowed their interest in Vietnam and planned to invest in sectors suchas retail, restaurants, and financial services, apart from tourism,fast-moving consumer goods, e-commerce and logistics.-VNA
ASEAN has been rising as anattractive destination for foreign investors in recent years. This isnot only a huge consumer market with around 600 million people but alsobeing favoured for its cheap and young labour market.
Furthermore,the establishment of the ASEAN Economic Community by the end of thisyear will create comprehensive economic integration among the 10 membercountries. Vietnam is forecast to cash in on the movement of capitalflows in the region.
The country is widely believed to be readyfor a second wave of M&A, with the total value of transactionsexpected to reach 20 billion USD between 2014 and 2018.
Accordingto a research of the M&A Forum 2015, total value of such deals inVietnam touched almost 4 billion USD in 2014, an increase of about 20percent over the previous year.
The average value of atransaction also rose from 5 – 8 million USD three years ago, to around11 million USD in 2014. Most of the big deals involved foreigninvestments ranging from 20 million USD to more than 100 million USD.
Retail was still the most eye-catching sector with 36 percent of total value, followed by consumer products at 21 percent.
Speakingat a press conference on July 16 while introducing the Vietnam M&AForum 2015 themed "Countdown to the Next Market Boom" slated for August 6in HCM City, Nguyen Anh Tuan, editor-in-chief of the Vietnam InvestmentReview, the organiser of the forum, said M&A activities in Viet Namthis year and in the next five years would be happening in thefavourable environment of a recovering economy.
Tuan said thecountry was speeding up its institutional reform and the legal frameworkfor M&A was being completed with a series of important lawsrelating to investment activities having been amended such as the Law onInvestment, Law on Enterprises, Law on Housing and Law on Real EstateBusiness.
The recent issue of the Decree 60 which allows higherforeign ownership limit in listed companies has also been highlyappreciated by both domestic and foreign investor communities.
Theprocess of bank restructuring and non-core divestment as well asacceleration of State-owned enterprises with a large number ofcorporations and large-scale enterprises being equitised this year andin the next five years would open up more opportunities for biggerM&A deals, he added.
According to Dang Xuan Minh, CEO of AVMVietnam, co-organiser of the event, the rise of the private sector inVietnam taking M&A as a strategy crucial to ensuring sustainablegrowth has added more dynamics to Vietnam's M&A.
Minhreferred to a deal by VinGroup which has spent 560 billion VND (25.7million USD) to buy Ocean Mart to develop its own supermarket chainVinMart.
He also noticed a new trend of rising investments fromThailand into Vietnam last year, which was different with the dominanceof Japanese companies in M&A deals in 2012 and 2013.
Minhsaid many Thai companies were seeking to tap Vietnamese consumer marketswhich could be seen on their M&A deals, such as PowerBuy which tookover Vietnamese electronics chain Nguyen Kim, and Berli Jucker PublicCo Ltd (BJC) which acquired Metro's business in Vietnam.
Accordingto Masakata Yoshida, CEO of Recof Corp, a Japanese M&A advisoryservice provider, deeper integration of the ASEAN community will bringboth opportunities and challenges for Vietnam.
While the countrycould penetrate deeper in other ASEAN markets, it would be also exposedto more fierce competition for foreign investments. The removal oftariffs among these countries could stimulate the change of productionbases of foreign companies, including Japanese ones, to other ASEANcountries, Yoshida said.
However, with a growing middle-class inVietnam, Yoshida said many Japanese medium and small-sized companiesshowed their interest in Vietnam and planned to invest in sectors suchas retail, restaurants, and financial services, apart from tourism,fast-moving consumer goods, e-commerce and logistics.-VNA
