Vietnam M&A Forum 2016 on stage in August

Under the theme “M&A in a Wider Economic Boundaries”, the Vietnam M&A Forum 2016, will conclude several activities including a specialised seminar on M&A activities in Vietnam, a networking programme, a deal awards ceremony, the issuance of Vietnam M&A Outlook 2016 publication, and a master-class under the theme “Fund Raising for M&A Deals”.

“2016 is an important year for Vietnam, hallmarking the formation of the Trans-Pacific Partnership (TTP), the Asean Economic Community, the Korean-Vietnam Free Trade Agreement (FTA), and the EU-Vietnam FTA. When investing in one ASEAN country, investors are now approaching not one single market but a combined 600-million market with young labour force and a rising middle-class,” Vietnam Investment Review’s editor-in-chief Le Trong Minh told the press conference, launching Vietnam M&A Forum 2016 this morning at Pullman Hanoi Hotel. “Thus, the upcoming forum will discuss and evaluate the strengths and weaknesses of Vietnam’s M&A deals in 2015, as well as the new opportunities and challenges when Vietnam is deepening its economic integration into the world.”

The Vietnam M&A Forum is a well-known annual event among the business community as well as domestic and international investors, which is co-organised by VIR and AVM Vietnam since 2009, under the patronage of the Ministry of Planning and Investment (MPI).

Over the past seven years, the forum has attracted more than 300 speakers hailed as top leaders and experts of large foreign and domestic corporations and investment funds, government policy makers, leaders from major state-owned corporations, companies, and private business groups operating in Vietnam.

“The MPI highly appreciates the M&A Forum and believes that this year’s event will focus on proposing specific solutions to complete the legal framework for M&A activities,” Deputy Minister of Planning and Investment Dang Huy Dong told participants at the press conference.

In the last few years, Vietnam has seen active M&A activities. In 2015, the total value of M&A deals sealed was $5.2 billion, five times that of 2009. Only in the first half of 2016 the number reached $3 billion, most of which was in the retail, consumer goods, and real estate sectors.

Dang Xuan Minh, general director of AVM and deputy head of Vietnam M&A Forum 2016’s Organising Board, said that the leading sectors/areas of M&A activity last year were retail and consumer goods, accounting for 38.46 per cent of the total value of M&A deals. The scale of only two M&A deals from Thailand accounted for 24.8 per cent of the total M&A value in 2015.

These figures indicate a trend of domestic and international retail investors finding ways to enter this 90-million market. Some remarkable deals in the industry were Vingroup buying Ocean Mart to form VinMart, Thai TCC Group buying Metro, and Japanese corporation Aeon investing in Citimart and Fivimart.

Though seeing limited M&A activities, the food manufacturing and retail sectors saw billion-dollar deals that involve foreign businesses, the most notable of which was Central Group acquiring BigC Vietnam for $1.14 billion. Also in retail, the upcoming deal of Vingroup buying supermarket chain Maximark is expected to post spectacular figures. Another billion- dollar deal was Singha buying 25 per cent of Masan Consumer Holding and 33 per cent of Masan Brewery, for $1.1 billion.

The number of M&A deals between domestic businesses accounted for 60 per cent of all M&A transactions in 2015, but their total value is only around $5 million. Foreign investors still rule the market making big deals of $30-100 million.

The main buyers are Thai, Japanese, and Singaporean investors. While Japanese companies seem to have developed a taste for airlines, petroleum producers, and pharmaceutical companies, Singaporean firms are known for huge real estate deals, and Thailand continues to invest in retail.

On the side-lines of the press conference, Baker & McKenzie’s business development manager Nicholas Mider told VIR that the upward trend in foreign direct investment (FDI) in Vietnam will continue, and will especially driven by the Thai, Japanese, and Korean markets. “The most attractive industries can be food and beverage, and real estate,” he said.

Nicholas also said that there were new laws in the pharmaceutical business which may result in a lot of new companies established, either as joint stock companies or subsidiaries, to get ready for the expansion.

“I do not think 2016 will see a lot of M&A deals in the pharmaceutical industry, but there will be a lot of companies getting ready for it,” he added.

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