The first seven months of the year saw 3,311 M&A deals involving foreign buyers in Vietnam, according to the General Statistics Office (GSO). The acquisitions were worth $4.79 billion, up 53.3 percent year-on-year.
But on the other hand, registered capital for newly-licensed projects in the period increased by a mere 2.2 per cent to $13.2 billion, while investment for expansion of existing projects declined by 15.9 per cent to $4.95 billion.
The major M&A deals announced in January-July included Warburg Pincus’s acquisition of stakes in one of Vietnam’s largest private lenders, Techcombank.
A bank announcement in March said two separate legal entities managed by the global private equity firm, which focuses on growth investing, will invest over $370 million in the bank.
In April, Singaporean sovereign wealth fund GIC Pte Ltd announced that it will invest about $1.3 billion in leading Vietnamese property developer Vingroup and related entities.
GIC will purchase ordinary shares and extend a debt-like instrument to Vingroup’s subsidiary Vinhomes. The combined value of the investment and debt instrument is about $1.3 billion.
In the biggest ever M&A deal in Vietnam’s paper industry, Japan’s Sojitz Corporation in June bought a 96 percent stake in the country’s largest paper firm, Saigon Paper Corporation. The Japanese media reported that Sojitz paid about JPY10 billion ($91.2 million) for the deal.
Also in June Vinfast, a subsidiary of Vietnam’s leading real estate developer, Vingroup, announced a deal to acquire the Hanoi factory of auto giant General Motors.
Vinfast will invest in manufacturing all-new compact automobiles with patents sold by GM. It will also take over GM showrooms across the country and be the sole dealer of Chevrolet vehicles in the country.
A new report by the Vietnam M&A Forum said foreign investors continue to dominate large- and medium-sized M&A deals, categorized as those in the range of $20-100 million.
The ratio of such deals has kept rising in recent years, but around 90 per cent remain small, at $5-6 million, according to the report.
Asian countries Singapore, Thailand, South Korea, and Japan are the leaders in the Vietnamese M&A market.
Last year foreign buyers accounted for 91.8 per cent of all M&A deals.
In comparison with the rest of the region, in 2016 the value of M&A deals in Vietnam was equivalent to 86 per cent of that of the Philippines ($6.75 billion), while the figures were $62.3 billion for Singapore and $11-16 billion for Indonesia, Thailand and Malaysia.
Last year with Thailand’s TCC Group acquiring 53.59 per cent of Vietnam’s number one brewer Sabeco for $4.89 billion, the value of M&As in Vietnam was $10.2 billion, closer to Malaysia’s $11.73 billion and Indonesia’s $10.76 billion, but further afield from Singapore, where it had jumped to $78.6 billion.
The Vietnam M&A Forum report forecasts that real estate, consumer goods, and banking and finance sectors will lead the Vietnamese M&A market this year.
Investors are most interested in property projects in big cities or new urban areas with a high population density, resorts and hotels in the downtown areas.
In the consumer goods sector, they are looking to invest in quality local brands with good distribution networks.
In banking and finance, consumer finance, cards and financial services companies are major draws.
Telecommunication, energy, infrastructure, pharmaceuticals and education sectors are also likely to attract M&A interest, the report says.
M&A experts see bright prospects for Vietnam’s M&A landscape despite challenges like the U.S. pulling out of the Trans-Pacific Partnership (TPP), the U.S.’s trade spat with China, continuing difficulties like the slow equitization of state-owned enterprises, few major divestments by the state, a shortage of quality enterprises for acquisition, and policy hiccups.
Some outstanding M&A deals in 2017 - 2018
Buyer/Investor | Seller | Stake | Value (million USD) |
Thaibev | Sabeco | 54% | 5,000 |
GIC Private Limited | Vinhomes | n/a | 1,300 |
Warburg Pincus | Techcombank | n/a | 361 |
JC&C | Vinamilk | 3% | 319 |
KKR | Masan | 10% | 250 |
ShinhanBank | ANZ | 100% | 240 |
GIC Private Limited | Techcombank | n/a | 100 |
Sojitz | Saigon Paper | 98% | 95 |
EarthChemical | A My Gia | 95% | 89 |
Vina Capital | Ba Huan | 16% | 33 |
Vinfast | GM Vietnam | n/a | n/a |