Merger and acquisition (M&A) deals in Vietnam are expected to total $6 billion this year, breaking a record of $5.2 billion set in 2012, as the ongoing economic reform will open up opportunities for investors, according to researchers of the Vietnam M&A Forum (MAF).
M&A transactions hit $3 billion in the first six months of this year, increasing 28% from a year earlier, the Dau Tu (Investment) newspaper reported.
Behind a surge in M&A activities in Vietnam are increased appetite of investors from regional countries such as Thailand, Singapore and Japan, said Dang Xuan Minh, CEO of AVM Company and head of the MAF researchers.
The rebound of the local real estate market and Vietnam’s participation in landmark free trade accords have also encouraged large deals, he added.
The Vietnamese government has taken bold steps to boost the privatization process of state-owned enterprises (SOEs), the private sector, and amended several laws on businesses and investment to smooth the investment climate.
“These will be key factors that stimulate domestic and foreign companies to go ahead with M&As,” Minh stressed.
Christopher Kummer, president of Switzerland-based Institute for Mergers, Acquisitions and Alliances (IMAA), noted that the M&A trend remains positive in the Asia-Pacific region thanks to the formation of the ASEAN Economic Community (AEC) despite a lackluster global outlook.
Vietnam is among few countries that still enjoy an M&A boom. Many Vietnamese business leaders are eager to talk about their M&A plans, Kummer tipped.
According to MAF researchers, retail sales, consumer goods and real estate will remain the main stages for the upcoming M&A deals in Vietnam. Big deals could take place in the telecommunication, energy, infrastructure and building material sectors.
Up to 60% of the number of M&A transactions are involved with Vietnamese companies, but their values are mainly small, hovering around $5 million.
Meanwhile, foreign players take the lead, with their deal values ranging from $30 million to $100 million. Notably, Thailand’s Central Group has acquired Casino Group’s Big C chain in Vietnam for $1.04 billion.