Foreign direct investment into Vietnam via mergers and acquisitions ison an upward trend, underlining the growing appetite among foreigncompanies to acquire stakes in existing companies as the fastest way tostrengthen their foothold in the country, reported Vietnam InvestmentReview.
Last year recorded 265 completed merger andacquisition (M&A) deals with a total value of 4.6 billion, theEnglish language online newspaper cited sources from the online marketintelligence and finance news firm StoxPlus.
Inbound M&A intoVietnam was valued at over 3 billion USDin 2014, StoxPlus reported.This number accounted for just a seventh of total foreign directinvestment last year, but represented a 64.9 percent bounce on thedisappointing 1.83 billion USD of inbound M&A recorded in 2013.
“This is a growing global trend and Vietnam is no exception. This isone of the fastest ways to expand business in Vietnam, particularly whenthe nation is going to enter a series of free trade agreements like theASEAN Economic Community, Vietnam-EU Free Trade Agreement and theTrans-Pacific Partnership,” said Nguyen Mai, Chairman of VietnamAssociation of Foreign Invested Enterprises.
Thaiinvestors are leading inbound M&As. Thai consumer conglomerate BerliJucker (BJC) last August announced it had offered 876 million USD tobuy the Vietnam cash-and-carry unit of German’s Metro AG. However BJCshareholders in January rejected the deal because of concern overfinancial risks, leaving TCC Holding – the largest shareholder in BJC –to carry on its interest in Metro alone.
Leading Frenchchocolate, biscuits, gum and sweets producer Mondelez Internationalannounced last year it would acquire an 80 percent stake in Kinh DoCorporation’s category-leading snacks business in Vietnam.
Giventhe growing momentum in 2014, foreign direct investment through M&Aactivities have also shown positive signs in 2015, with deals announcedby Thai and Japanese companies. Thailand’s Central Group in Januaryannounced it will acquire 49 percent of Vietnam’s electronics retailerNguyen Kim.
Japan’s largest retailer Aeon last month alsoannounced it would acquire two Vietnamese retailers Citimart andFivimart, in line with the construction of its own stores in the northand the south.
StoxPlus said that inward M&A activities willkeep on rising in 2015, given the acceleration of equitisation ofstate-owned enterprises (SOEs). More than 300 SOEs are slated forequitisation, offering huge opportunities for foreign investors to jumpinto the market.
“From 2015, SOEs’ initial publicofferings for telecommunications, construction and materials, retail,and travel and leisure are all going to take place,” the company statedin a note, pointing to the growing M&A opportunities.
According to a recent StoxPlus survey, 66 percent of foreign investorswere optimistic about M&A opportunities from SOE equitisationprocess.
“This indicates that there will beincreased foreign interest in SOE equitisations and state divestment inthe coming year,” the company said.
Foreigninvestors will also be encouraged by the changes in rules from July 1,when the newly amended Investment Law will no longer require them tolengthy investment certificate procedures when buying stakes inVietnamese companies. This is expected to end years of uncertainty andfrustration faced by foreign investors eyeing Vietnam market entry orexpansion through M&As.-VNA
Last year recorded 265 completed merger andacquisition (M&A) deals with a total value of 4.6 billion, theEnglish language online newspaper cited sources from the online marketintelligence and finance news firm StoxPlus.
Inbound M&A intoVietnam was valued at over 3 billion USDin 2014, StoxPlus reported.This number accounted for just a seventh of total foreign directinvestment last year, but represented a 64.9 percent bounce on thedisappointing 1.83 billion USD of inbound M&A recorded in 2013.
“This is a growing global trend and Vietnam is no exception. This isone of the fastest ways to expand business in Vietnam, particularly whenthe nation is going to enter a series of free trade agreements like theASEAN Economic Community, Vietnam-EU Free Trade Agreement and theTrans-Pacific Partnership,” said Nguyen Mai, Chairman of VietnamAssociation of Foreign Invested Enterprises.
Thaiinvestors are leading inbound M&As. Thai consumer conglomerate BerliJucker (BJC) last August announced it had offered 876 million USD tobuy the Vietnam cash-and-carry unit of German’s Metro AG. However BJCshareholders in January rejected the deal because of concern overfinancial risks, leaving TCC Holding – the largest shareholder in BJC –to carry on its interest in Metro alone.
Leading Frenchchocolate, biscuits, gum and sweets producer Mondelez Internationalannounced last year it would acquire an 80 percent stake in Kinh DoCorporation’s category-leading snacks business in Vietnam.
Giventhe growing momentum in 2014, foreign direct investment through M&Aactivities have also shown positive signs in 2015, with deals announcedby Thai and Japanese companies. Thailand’s Central Group in Januaryannounced it will acquire 49 percent of Vietnam’s electronics retailerNguyen Kim.
Japan’s largest retailer Aeon last month alsoannounced it would acquire two Vietnamese retailers Citimart andFivimart, in line with the construction of its own stores in the northand the south.
StoxPlus said that inward M&A activities willkeep on rising in 2015, given the acceleration of equitisation ofstate-owned enterprises (SOEs). More than 300 SOEs are slated forequitisation, offering huge opportunities for foreign investors to jumpinto the market.
“From 2015, SOEs’ initial publicofferings for telecommunications, construction and materials, retail,and travel and leisure are all going to take place,” the company statedin a note, pointing to the growing M&A opportunities.
According to a recent StoxPlus survey, 66 percent of foreign investorswere optimistic about M&A opportunities from SOE equitisationprocess.
“This indicates that there will beincreased foreign interest in SOE equitisations and state divestment inthe coming year,” the company said.
Foreigninvestors will also be encouraged by the changes in rules from July 1,when the newly amended Investment Law will no longer require them tolengthy investment certificate procedures when buying stakes inVietnamese companies. This is expected to end years of uncertainty andfrustration faced by foreign investors eyeing Vietnam market entry orexpansion through M&As.-VNA
