Thailand
Foreign businesses lead in Vietnam’s M&A market
The Hanoitimes – Foreign firms are leading in mergers and acquisitions (M&A) in Vietnam as they control up to 75 per cent of the country’s major M&A deals, Nguyen Quoc Viet, deputy general director of AVM Vietnam Company, said.
Vietnam’s M&A markets this year saw many deals in the industrial sector with the participation of foreign firms such as Thailand’s Siam Cement Group (SCG) and Vietnam Construction Materials Company, South Korea’s CJ CheilJedang and Cau Tre Export Goods Processing Joint Stock Company, Japan’s Earth Chemical and A My Gia Company or South Korea’s Daesang and Duc Viet Food.
Especially, Thai Beverage on December 18 bought 343.6 million shares, or a 53.6 per cent stake, of the Saigon Beer, Alcohol and Beverage Corporation (Sabeco) at an estimated VND110 trillion (US$4.89 billion), making it the biggest deal so far. The deal will bring the total value for M&A deals in the country this year to US$8 billion.
Especially, Thai Beverage on December 18 bought 343.6 million shares, or a 53.6 per cent stake, of the Saigon Beer, Alcohol and Beverage Corporation (Sabeco) at an estimated VND110 trillion (US$4.89 billion), making it the biggest deal so far. The deal will bring the total value for M&A deals in the country this year to US$8 billion.
According to Viet, the foreign companies acknowledged Vietnam’s growth potential and were ready to implement deals with high prices thanks to their capital advantages.
They expect double or triple digit growth for consumption and retail sectors, he said, adding that Vietnam had huge potential due to its rapid integration into the world culture of young people.
He said foreign investors would buy at high prices knowing they could get better yields in a few years by improving money flow and administration.
M&A activities in Vietnam in recent years have rapidly increased in number and economic value, he added.
Vu Ba Phu, director of the Vietnam Nam Trade Promotion Agency (Vietrade) said many foreign investors poured capital into Vietnamese listed firms to realize long-term targets of getting a toe-hold in the country.
Of these, investors from Japan, South Korea and Thailand had been investing in consumer goods, financial services, retails, distributions and building materials.
“However, there were not many deals from big investors in the EU and north America, which are considered to have big potential. This is why Vietnam should further promote international investment,” Phu said.
Vietnam’s industrial sector has seen strong development. The average index of industrial production (IIP) growth rate has been more than 7 per cent a year since 2012.
Metal production posted an 18 per cent increase in 2016, following by electronics and computers at 13 per cent.
Figures from the General Statistics Office showed that the IIP in the first 11 months of the year posted 9.3 per cent year-on-year rise.
“The figures reveal that Vietnam’s industrial sector has been in strong growth. If local industrial firms promote co-operation with foreign companies that have high technologies and professional management, they have opportunities for further development,” he said.
Tran Kim Oanh, director of the Vietrade’s Centre for Industry and Trade Investment Promotion, said many Vietnamese companies built long-term development strategies, but M&A was one of their most important tools.
She said that local investment funds have seen development both in quantity and scale, thus contributing to more M&A deals. With the advantage of deep understanding of the domestic market, investment promotion through M&A should pay more attention to potential local firms.
They expect double or triple digit growth for consumption and retail sectors, he said, adding that Vietnam had huge potential due to its rapid integration into the world culture of young people.
He said foreign investors would buy at high prices knowing they could get better yields in a few years by improving money flow and administration.
M&A activities in Vietnam in recent years have rapidly increased in number and economic value, he added.
Vu Ba Phu, director of the Vietnam Nam Trade Promotion Agency (Vietrade) said many foreign investors poured capital into Vietnamese listed firms to realize long-term targets of getting a toe-hold in the country.
Of these, investors from Japan, South Korea and Thailand had been investing in consumer goods, financial services, retails, distributions and building materials.
“However, there were not many deals from big investors in the EU and north America, which are considered to have big potential. This is why Vietnam should further promote international investment,” Phu said.
Vietnam’s industrial sector has seen strong development. The average index of industrial production (IIP) growth rate has been more than 7 per cent a year since 2012.
Metal production posted an 18 per cent increase in 2016, following by electronics and computers at 13 per cent.
Figures from the General Statistics Office showed that the IIP in the first 11 months of the year posted 9.3 per cent year-on-year rise.
“The figures reveal that Vietnam’s industrial sector has been in strong growth. If local industrial firms promote co-operation with foreign companies that have high technologies and professional management, they have opportunities for further development,” he said.
Tran Kim Oanh, director of the Vietrade’s Centre for Industry and Trade Investment Promotion, said many Vietnamese companies built long-term development strategies, but M&A was one of their most important tools.
She said that local investment funds have seen development both in quantity and scale, thus contributing to more M&A deals. With the advantage of deep understanding of the domestic market, investment promotion through M&A should pay more attention to potential local firms.
Source: http://hanoitimes.com.vn/economy/2017/12/81E0BDAB/foreign-businesses-lead-in-vietnam-s-m-a-market/