M&A market shrinks by 23%

With the unfavorable global conditions, the M&A market is unlikely to match last year’s $6.18 billion, according to professional services company KPMG.

But the average value of each was 3.5 times up at $54.5 million, the highest since 2008, and Warrick Cleine, president and CEO of KPMG Vietnam & Cambodia, said this showed that the quality of deals have gone up.

The biggest deals were Sumitomo Mitsui Banking Corporation acquisition of a 15% stake in VPBank for $1.4 billion, and ESR Group’s purchase of stakes in warehouse leasing company BW Industrial for $450 million.

Other notable deals included Thomson Medical Group buying FV Hospital in Ho Chi Minh City for $381 million and Bain Capital investing $200 million in retailer Masan Group.

The finance sector accounted for 47% of the deals, property for 23% and healthcare for 10%.

Japanese investors led in investment at $1.6 billion, followed by Singapore, $1.1 billion, and the U.S., $472 million.

Analysts expect 2024 too to be a modest year for the M&A market.

But in the long run there are many opportunities and Vietnam’s M&A market is set to reach $20 billion in the next three years, Binh Le Vandekerckove, founder of deal consulting firm ASART, said.

Minister of Planning and Investment Tran Duy Dong said the recovery of the economy and business growth would attract M&A interest from foreign companies soon.

Masataka Sam Yoshida of consulting firm RECOF said the Vietnam market is now ideal for Japanese firms to enter or expand, and 85% of his company’s activities involve their investment in Vietnam.

But he said improvements are needed to attract more investment, pointing out that it takes 12 months to complete an M&A deal in Vietnam compared to six months in the west and three months in Japan.