Driving M&A success amid the pandemic

December 09, 2021 | 18:42
Businesses are facing down challenges to conclude a slew of deals with potential businesses in the midst of the global health crisis. Panellists at Vietnam M&A Forum 2021 shared some of their experiences and insights into conducting successful M&A deals during the COVID-19 pandemic.
Driving M&A success amid the pandemic
Truong An Duong, general manager, residential, Frasers Property Vietnam

Frasers Property has entered Vietnam in 1995. Over the past three years, the company has stepped up its operations in the market. The developer has so far been involved in residential, office space, and commercial buildings. To complete its ecosystem, Fraser Property Vietnam has completed the acquisition of an industrial park (IP) site in Binh Duong in 2021.

Concluding the deal was a challenge due to the COVID-19 pandemic. The price of IP sites have increased significantly. The industrial land segment is very hot, with many players. However, Frasers Property still managed to secure this deal thanks to our financial capability. The company has a large enough budget to participate in M&A transactions. The company spends one to two years to develop human resources that are capable of IP operation.

Moving forward, Frasers Property will continue to diversify its investment portfolio in Vietnam like commercial and retail segments. The group also focuses on high-end residential buildings in downtown and urban townships in areas surrounding Ho Chi Minh City and Hanoi.

Driving M&A success amid the pandemic
Nguyen Thai Phien, deputy CEO, NovaGroup

From humble beginnings as a private firm, NovaGroup has experienced different phases of development. NovaGroup is now restructuring its strategy to become an economic group based on three pillars: Novaland Group, Nova Services Group, and Nova Consumer Group, operating in real estate, trade and services, and agriculture and consumer goods.

When conducting M&A deals in manufacturing and consumer goods industries, NovaGroup's team will spend a great deal of time on evaluating the inventories and manufacturing processes of each potential target. After that, NovaGroup will focus on restructuring the business. Among them, human resource managment plays an important role in making successful transition post-M&A. Specifically, NovaGroup will arrange key leadership positions depending on the ownership ratio of each business.

NovaGroup only acts as a partner and bring new contracts to the business if it holds 30-35 per cent of the stake. If we hold 51-60 per cent, NovaGroup will continue M&A to get the controling share and appoint a number of leaders in the acquired firm.

Domestic investors like NovaGroup have become more agressive in Vietnam's M&A market. They quickly made decisions to grab new opportunities. With local understanding, they have realised the potential of the market. Thus, they are willing to take higher risk for M&A deals.

Driving M&A success amid the pandemic
Angus Liew, general director, Gamuda Land (HCMC)

Vietnam's M&A market remains robust amidst the global health crisis. Vietnam still posts postive economic growth. Gamuda Land has deloyed M&A strategy to expand operations in Vietnam through deals like the acquisition of land sites.

We had some potential M&A deals pre-pandemic but we had to cancel them during the COVID-19 wave. The world has been turned upside down with many industries like retail and transport hit especially hard. Despite the cacellations, we are seeing the recovery of M&A deals and pricing.

Foreign investors are still focusing on the Vietnamese market, which is a positive sign. Vietnam is our largest overseas market apart from Malaysia. Gamuda Land has more advantage than other foreign investors as we have already set up a physical presence in the country.

However, it is challenging to complete M&A deals during the social distancing period. Investors have to make most negotiations virtually. I believe we need more time to see the full recovery of the M&A market.

Driving M&A success amid the pandemic
Thuong Pham, deputy CEO/CFO, BCG Energy

BCG Energy, a subsidiary of Bamboo Capital Group, has been looking for investment and M&A opportunities in renewable energy and finance industries in Vietnam since 2018. The company has secured a number of successful M&A deals involving foreign investors despite the impact of the global health crisis. At the peak of the Delta wave in July, BCG Energy inked a deal with its Singaporean partner to raise funds for its solar energy business.

On December 5, BCG Energy and Singapore's Leader Energy Pte., Ltd. have signed an agreement on investment and co-development in renewable energy. Accordingly, BCG Energy has raised $43.6 million under convertible bond form from Leader Energy to continue to invest in renewable energy.

Bamboo Capital has recently ventured into financial industry after acquiring 80.64 per cent shares of AAA Insurance JSC. The group intends to continue improving the service quality of AAA Insurance and expand to the life insurance segment in the near future.

To achieve successful M&A transactions, local investors should focus on building transparency, trust, and human resources to complete necessary procedures and promote development post-M&A.

By Thanh Van

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