M&A Forum hears favorable conditions will continue to drive new deals.
Merger and acquisition (M&A) activities have been robust this year and are expected to continue to be so next year according to many experts at the Vietnam M&A Forum 2015. Mr. Bui Ngoc Hong from law firm LNT & Partners said that M&A activities are dynamic at this point in time, with many high-value deals being struck. He also predicted that M&A would boom in the future.
Of a similar mind, Deputy General Director of KPMG Vietnam, Mr. John Ditty, said that the number of M&A deals in Vietnam in the first half of year was equal to 75 per cent of the number for last year as a whole. He predicted the number of M&A deals would increase throughout the remainder of the year, saying this is not the start of a boom in M&A but a peak period.
He added that M&A activities would be seen in more fields, with emerging deals being in shopping malls, retail, manufacturing, and real estate. The restructure and reform in opening up Vietnam’s market to foreign investors would accelerate M&A deals. When investors note the improved investment environment they will have the belief to invest, he said.
Investment regulations are acknowledged as being more open. Mr. Hong used the example of foreign investors previously having to seek permission even when they wished to purchase only 1 per cent of a stake in a Vietnamese enterprise. They now need not seek permission when they purchase less than 49 per cent of a domestic enterprise.
There are more fields where Japanese investors can join in M&A deals, Senior Managing Director of Recof Corporation, Mr. Masataka Sam Yoshida, said. He also stressed that Vietnam has a young population and a nascent market, so is a target of Japanese investors looking at areas such as food and beverages, finance, fast-moving consumer goods (FCMG), and logistics.
The Chairman of the State Securities Commission of Vietnam, Mr. Vu Bang, said that factors accelerating the M&A process are the restructuring of the economy and the banking sector as well as Decree No. 60, which lifts limits on foreign investors purchasing shares in listed companies. These factors present more opportunities to foreign investors in sectors such as steel and retail.
Besides improvements in the legal framework, such as the amended Law on Public Investment and Law on Enterprises, private domestic enterprises choosing M&As as a strategic plan to restructure and achieve stable growth was also said to be a key factor.
- John Ditty
- LNT & Partners
- State Security of Vietnam