M&A deals boost business transparency

15:26 | 23/08/2018 Economy

(VEN) - Mergers and acquisitions (M&A) are attracting great attention of domestic and foreign investors. This form of investment not only helps businesses attract quality capital flows but also contributes to the transparency of investment and business activities.

ma deals boost business transparency
M&A facilitates technology transfer and connectivity between domestic and foreign businesses

Great attractiveness

Ministry of Planning and Investment data showed that from 2008-2017, 4,000 M&A deals totaling US$48.8 billion in value were successfully implemented in Vietnam, with M&A value hitting US$10.2 billion in 2017 alone, up 175 percent from 2016 and the highest value reached so far.

The biggest deal in 2017 was that of the ThaiBev Group (Thailand). Through its subsidiary, Vietnam Beverage, the group acquired 51 percent of shares of the Saigon Beer-Alcohol-Beverage Joint Stock Corporation (SABECO) for US$5 billion. M&A deals totaled US$3.35 billion in the first half of 2018, up 39 percent from the same period in 2017, and are expected to reach US$6.5 billion in 2018.

Michael DC Choi, Deputy Director General of the Korea Trade-Investment Promotion Agency (KOTRA), said that in the first five months of 2018, almost 300 Korean businesses came to seek business opportunities in Vietnam, many of which implemented M&A deals.

According to Deputy Minister of Planning and Investment Nguyen The Phuong, the M&A market in Vietnam is attractive to foreign investors for several reasons, not the least of which is the country’s positive economic growth in recent years and its economic stability. Vietnam experienced economic growth of 7.08 percent in the first half of this year, the highest of the past decade.

Economists say the Vietnamese market of almost 100 million and the state-owned enterprise equitization policy, apart from high economic growth, all make the Vietnamese M&A market more attractive.

Promoting sustainable growth

Nguyen Noi, Deputy Head of the Ministry of Planning and Investment’s Foreign Investment Agency (FIA)), said most successful M&A deals have involved foreign investors. In 2017, foreign investor-related M&A deals reached US$6.3 billion, accounting for 61.7 percent of the country’s total.

Noi said M&A facilitates technology transfer and connectivity between domestic and foreign businesses. Foreign investors’ involvement contributes to making production and trading operations more transparent, transfer pricing control and better implementation of tax and other obligations by business, he added.

Processing and manufacturing industries, retail services, finance and banking, and real estate sectors have attracted

M&A investors.

Nguyen Hoa