Vietnam’s solid economic fundamentals continue to attract overseas investors, while cross-border acquisitions will dominate M&A deals in coming years, according to Baker McKenzie’s latest report “Global Transactions Forecast 2020”.

The report forecast Vietnam’s GDP growth to continue to ease over the next 18 months from 6.7% in 2019 to 6.3% in 2020 and 6% in 2021, mainly due to the fact that export growth trends lower amid cooling Chinese import demand and increased global protectionism.

However, the country’s average GDP growth in the 2019 – 2022 period, projected at 6.2%, remains higher than the global average at 2.8%.

“Vietnam remains active in M&A right now, due to positive market factors and confidence that help create business opportunities as well as multilateral agreements that continue to prompt regulatory reform,” Seck Yee Chung, who heads Baker McKenzie’s M&A practice in Vietnam, said in the report.

In 2019, the largest M&A deal was US$1-billion investment from South Korea’s SK Group in Vietnam’s major privately-run conglomerate Vingroup, followed by a 15% stake acquisition in state-run Bank for Investment and Development of Vietnam (BIDV) by South Korea’s Hana Bank worth US$850 million.

Overall, Vietnam recorded 58 M&A deals in 2019 worth US$2.6 billion, including 17 domestic deals and 41 involving foreign investors.

In 2020, the number of deals is expected to reach 55 with total transactions of US$1.7 billion, and the number of cross-border deals continue to dominate the Vietnam’s M&A market with 36 or 65% of the total number.

By 2021, the M&A transactions could rise to US$2.8 billion and  US$3.4 billion by 2022, in which the number of deals to increase to 98 and 119 in the 2021 – 2022.

Baker McKenzie pointed to 10 transaction attractiveness indicators of Vietnam, in which the openness level of the economy ranked as best performer at 10 out of 10 maximum score. Other indicators such as government effectiveness, money supply and ease of doing business were in range of six to eight points, while the lowest point was given to GDP per capita.