South Korean investors dominate M&A deals in Vietnam

By Dat Nguyen   July 24, 2019 | 12:20 am PT
South Korean investors dominate M&A deals in Vietnam
The logo of SK Innovation is seen in front of its headquarters in Seoul, South Korea. Photo by Reuters/Kim Hong-Ji.
South Korean investors led merger and acquisition deals in Vietnam last year and the first half of this year.

In the first six months of this year, the value of M&A deals reached almost $5.43 billion, 88 percent of which came from foreign investors acquiring stakes in Vietnamese firms, according to data released Wednesday by analysts at the Vietnam Mergers and Acquisition Forum (MAF) 2019.

"South Korea has risen to be the biggest investor with M&A deals worth $2.2 billion in 2018. Their interests are finance, technology, real estate and consumer goods," the MAF report said.

The biggest H1 M&A deal was struck in May, when South Korean firm SK Group became a big shareholder in the Vingroup conglomerate by pouring nearly $1 billion for a 6.15 percent stake.

Last September, SK Group had also acquired a 9.5 percent stake in Masan Group, a major food and agricultural company, for $470 million.

South Korean conglomerate Hanwha Group last August spent $400 million on a 6 percent stake in Vingroup through its subsidiary Hanwha Asset Management.

Asset manager ASAM Vietnam, which manages capital of many South Korean investment firms, last September poured VND200 billion ($8.56 million) into local investment and trading firm TNG.

Continuing the trend, South Korean KEB Hana Bank announced this month that it would pay $885 million for a 15 percent stake in state-owned bank BIDV. The government currently owns a 95.28 percent stake in this second largest listed bank by market cap.

Other investors from Singapore, Hong Kong, Thailand and Japan also struck major deals last year and in the first six months of this year.

MAF analysts said that M&A deals in the period focused on consumer goods production, real estate, consumer finance, retail and seafood.

Vietnam recorded an M&A value of $7.6 billion last year, a 25 percent fall from 2017, when Thailand’s Thai Beverage (ThaiBev) spent $4.78 billion to acquire a 53.59 percent stake in Vietnam’s largest brewer Sabeco.

In 2017, Thailand was the most prominent investor with major M&A deals in the sectors of retail (Big C, Metro and Nguyen Kim), construction materials (Prime Group and Vietnam Construction Materials Jsc), plastic (Binh Minh Plastic and Tien Phong Plastic) and beer (Sabeco). But since last year, Thailand has been replaced by South Korea. 

Vietnam ranked second in Southeast Asia in terms of M&A value last year, behind Thailand, MAF analysts said. They forecast that M&A deals in Vietnam this year would be worth around $6.7 billion, down 11.8 percent from 2017.

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