Breakthrough opportunities for M&A deals

11:29 | 24/08/2016 Economy

(VEN) - Vietnam’s mergers and acquisitions (M&A) deals have strongly increased in recent years and are able to create a breakthrough in the coming time, according to the Ministry of Planning and Investment.

Breakthrough opportunities for M&A deals

Six-fold increase

Vietnam’s M&A deals reached US$1 billion in 2009, and its value totaled US$5.2 billion six years later. This figure stood at US$3 billion in the first six months of this year, an increase of 28 percent compared to a year ago, and is expected to reach more than US$6 billion in the whole year, a six-fold increase compared to 2009.

M&A deals have been flourishing in various business sectors, especially in the retail sector with 38.46 percent of total value in 2015. For example, Thailand’s Central Group bought Big C for US$1.140 billion, the Singha Asia Holding Pte Ltd acquired 25 percent of Masan Consumer Holding and over 33 percent of Masan Brewery, and Vingroup took over Maximark supermarket chain.

In addition to the retail sector, M&A deals have strongly increased in real estate with the presence of Vietnam’s two large partners including Thailand and Japan.

Leverage from international integration and policy changes

Prospects for successful M&A deals in Vietnam in the coming time are huge thanks to opportunities offered by international economic integration and positive impacts from policy changes, according to the Ministry of Planning and Investment.

Vietnam Investment Review Editor-in-Chief Le Trong Minh said that international economic integration through a series of bilateral and multilateral free trade agreements has provided big opportunities for Vietnam in investment attraction via M&A deals. Together with the establishment of the ASEAN Economic Community, investors will be able to enter the market with more than 600 million people when investing or implementing M&A deals in Vietnam.

Deputy Minister of Planning and Investment Dang Huy Dong said that amended Investment Law and Enterprise Law have contributed to creating favorable conditions for businesses. In addition, the government issued Resolution 35 dated May 16, 2016 on developing businesses and promoting administrative reforms. These policies have proved the government’s determination in improving the investment environment.

Fluctuations in the global and regional economic situation, challenges facing low economic efficiency, labor productivity and competitiveness, inadequacies in the legal framework for M&A deals, and slow equitization of state-owned enterprises have posed difficulties for the success of M&A deals. Therefore, Vietnam needs to pay special attention to these issues.


Nguyen Hoa