Deals propel domestic diversification

May 04, 2024 | 23:23
(0) user say
Several Vietnamese corporations are actively pursuing acquisitions abroad, enhancing their global footprint and capabilities through strategic investments in foreign companies.
Deals propel domestic diversification
Names like FPT have been active in engaging with M&As for a decade, Photo: Shutterstock

At last week’s AGM, Thanh Cong Textile Corporation (TCM) announced its acquisition of the SY Vina textile plant. The plant was previously under the ownership of E-Land Asia Holdings Pte. Ltd.

This strategic purchase provides TCM with a crucial dyeing permit, facilitating the company’s foray into high-value fabric segments targeted for the US market.

“The acquisition of SY Vina not only equips us with essential dyeing capabilities but also propels our diversification into premium textile products,” noted a TCM executive.

Earlier in March, FPT Corporation’s strategic acquisition of Next Advanced Communications from Japan substantially enhances its expertise by incorporating 300 skilled Japanese engineers specialising in strategic consulting, design, and systems planning.

Do Van Khac, CEO of FPT Japan, said, “This acquisition is a key component of our strategy to generate $1 billion in revenue from the Japanese market by 2027, with plans to ensure that more than half of the workforce in Japan consists of international employees.”

FPT is navigating significant challenges such as Japan’s ageing population, labour shortages, and complex IT systems, he added. “Our approach involves building a robust local engineering team and partnering with Japanese enterprises to maintain seamless operations amid geopolitical hurdles. We are also committed to cultivating a diverse workplace culture,” Khac said.

FPT has been actively engaging in mergers and acquisitions (M&As) since 2014, targeting leading global technology firms. Last year, it also acquired 80 per cent of AOSIS, a French technology consultancy, significantly expanding its network and adding a substantial number of tech experts in Europe.

“The AOSIS integration widens our European and global footprint, enhancing our ability to support clients’ digital transformation journeys,” an FPT spokesperson stated.

Before the AOSIS transaction, FPT had already made significant moves in the global market by investing in US-based Landing AI, and acquiring Cardinal Peak, a North American tech engineering firm.

Coteccons Construction Corporation in February announced the successful acquisition of 100 per cent interest in two infrastructure-focused businesses, Sinh Nam Metal Vietnam and UG Mechanical & Electrical Vietnam. Both companies are notable for their foreign investment-backed operations.

This move marks a significant expansion for Coteccons, previously recognised for its robust portfolio in civil and industrial construction. With these acquisitions, the company strategically broadens its capabilities into infrastructure projects, including airports, transportation networks, and various public works.

In December 2023, Coteccons acquireda full stake in electromechanical company Sinh Nam Metal Vietnam, aiming to broaden its operational scope and enhance its market presence through diversification and brand strengthening.

Established in 2008, Sinh Nam Metal designs, manufactures, and installs aluminium and glass facade systems, coupled with offering project management services for mid to high-end projects.

These initiatives underscore a revival in the prominence of domestic enterprises within the global M&A landscape. Prominent Vietnamese corporations have been actively purchasing foreign companies in deals often exceeding $100 million since 2019. Notable players include Masan, Vinamilk, Gelex, Thaco, REE, and Bamboo Capital Group (BCG).

In late 2021, BCG and BCG Financial emerged as the largest shareholders in AAA – a non-life insurance company from Australian insurance group IAG. A fortnight ago, BCG revealed its plans to enhance AAA Insurance’s capitalisation and list it for trading on the Unlisted Public Company Market.

Hopes raised for M&A improvement in 2024 Hopes raised for M&A improvement in 2024

With 2023 focused on finding a balance to move towards sustainable development, Vietnam’s mergers and acquisitions market is forecast to converge, ready for a new growth phase.

Notable new inked M&A deals  set tone for the rest of the year Notable new inked M&A deals set tone for the rest of the year

Although the start of the year often spells a quieter period for mergers and acquisitions, 2024 has seen some notable deals announced.

Mergers and acquisitions slow going in logistics sector until risks subside Mergers and acquisitions slow going in logistics sector until risks subside

Mergers and acquisitions in the logistics industry are yet to thrive this year, as economic headwinds continue to prevent major movements.

By Luu Huong

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional