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M&As soar in 1H

Released at: 15:44, 28/07/2017

M&As soar in 1H

Photo: Masan

Twenty-three deals worth $921 million made in first half of year, according to Mergermarket Group.

by Linh San

Targeted merger and acquisition (M&A) activity in Vietnam remained active in the first half of 2017, with 23 deals worth $921 million, according to the latest report from Mergermarket Group.

The Consumer sector saw five announced deals totaling $359 million in the first half, becoming the most active sector by volume and the second-largest by value, following Construction. Three of the five highest value deals were in the Consumer sector. The two largest were the 7.5 per cent stake in Masan Nutri-Science Corporation and the 4.2 per cent stake in Masan Group the US-based private equity firm Kohlberg Kravis Roberts & Co LP acquired for $150 million and $100 million, respectively.

Japan and South Korea have been the leading two countries investing in Vietnam since 2015. Japan made 19 M&A deals worth $922 million from 2015 to the first half of 2017, including two deals worth $81 million in the first half of this year, with Business Services the most targeted sector followed by Consumer. South Korea, meanwhile, invested in 12 deals worth $344 million during the same period, including two deals worth $57 million during the first half of 2017. Industrial & Chemicals caught the most attention from South Korean investors, followed by Consumer.

The M&A deal pipeline in the Business Services sector, especially education, is expected to be strong in the second half, as Vietnam-based education companies have been seeking to expand their business in Southeast Asia, where there is a combined population of around 500 million, according to Mergermarket.

The Vietnam-based 360 Degrees JSC secured a 51 per cent stake in Thanh Tay University while the Vietnam Australia International School was acquired by the US-based TPG Capital in the first half. According to Mergermarket intelligence, Vietnam-based education providers Topica Edtech and TTC Education are seeking to launch a new fund to expand their business in Southeast Asia while ILA Vietnam is also in talks with several private equity firms over a trade sale.

The Mergermarket report said that Southeast Asia saw a sluggish first half in M&A activities. The region recorded 180 deals valued at $24.4 billion; 33 fewer deals and a 15.2 per cent decrease in value compared to first half 2016 (with 213 deals and $28.8 billion). This came as the result of a slowdown in intra-regional activity, with 97 deals valued at $6 billion. Deal value declined 67.47 per cent with 19 fewer deals within the region compared to first half of 2016 (with 116 deals and $18.4 billion); the second-lowest first half value since 2005 according to Mergermarket’s records.

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