M&A Vietnam Forum 2019 – “Going for breakthrough”

Vietnam M&A Forum 2019 will be held at GEM Convention Center, Ho Chi Minh City on Tuesday, August 6, 2019

This morning (July 23, 2019) in Hanoi, the Organising Board of the Vietnam M&A Forum 2019, under the auspices of the Ministry of Planning and Investment (MPI), held a press conference announcing the forum's 2019 edition.

After a decade of strong growth with thousands of transactions and a total transaction value of nearly $50 billion, the Vietnamese M&A market entered a new era with many new opportunities. Total M&A deal value in 2018 reached $7.64 billion, equaling 74.9 per cent compared to 2017. However, without Sabeco’s record deal, the pulling factor in 2017, the deal value in 2018 increased by 41.4 per cent.

In the first six months of 2019, the total value of announced M&A deals in Vietnam only reached $1.9 billion (equal to 53 per cent of the same period in 2018, which had the value of $3.55 billion). According to statistics from the MPI's Foreign Investment Agency, foreign investors spent $2.64 billion on buying domestic shares in this period.

The most exciting deals in 2018-2019 focused on exploiting Vietnam's market of more than 96 million people, including consumer goods manufacturing and real estate. Notable deals also focus on consumer finance, retail, fisheries, logistics, and education.

If 2017 was the year of capital from Thailand, 2018 marked the prosperity of capital flows from South Korea with big investment deals. However, foreign investors, particularly the ones from Singapore, Hong Kong, Thailand, South Korea, and Japan, still play an important role in M&A activities.

The highlights of these deals were South Korean investors (like SK Group and Hanwha) and Vingroup, the value of whose deals in the role of both buyer and seller was $2.41 billion, accounting for 25.64 per cent of the total M&A value between July, 2018 and July, 2019.

There have been two notable divestments. One was the deal between An Quy Hung and Vinaconex which came to be known as the biggest state divestment. The other was Vietnamese enterprise Saigon Co.op buying French supermarket chain Auchan’s local operations, helping them to withdraw from Vietnam.

The process of equitisation and divestment in 2018 and the first six months of 2019 has been slower despite certain efforts and results. The M&A Forum's Research Team highlighted the need to drastically remove barriers to achieve the goals and expectations of the government and investors.

In 2019, M&A value may reach $6.7 billion (88.16 per cent compared to 2018). In the medium term, the scale of the Vietnamese M&A market has surpassed that of 2014-2016 by $5 billion and remained stable at $6-6.5 billion, with more effort needed to reach $10 billion.

Le Trong Minh, editor-in-chief of VIR and head of the Vietnam M&A Forum 2019 Organising Board, speaking at the press conference

In this context, a series of recent policy moves such as draft amendments and adding a number of important laws (the Law on Investment, Law on Enterprise, or the Securities Law), the issuance of a resolution on attracting new-generation of foreign investment by the Politburo, or the signing of new-generation free trade agreements such as the CPTPP, EVFTA, or EVIPA are expected to open great opportunities for Vietnam to enhance the attraction of foreign investment, including investment capital flows through M&A.

However, the government and related parties must be determined to change in order to further improve the investment and business environment and attract more domestic and international capital to the M&A market.

In addition, there are still challenges from both outside and inside Vietnam, including the US-China trade tensions, obstacles to the equitisation and divestment of state-owned enterprises, the quality of enterprises, and the relatively small scale of the economy, or the unfulfilled policy barriers of the Vietnamese economy.

These are the reasons why the organiser of the annual M&A Forum chose the theme of “Going for breakthrough” for 2019.

“This is a unique forum in Vietnam which has been organised each year for more than a decade. It shows that the forum’s Organising Board has been making great efforts to promote this effective investment channel and contribute to a transparent M&A market in both quality and quantity, creating added value to related parties,” said Le Trong Minh, editor-in-chief of VIR and head of the Organising Board of Vietnam M&A Forum.

With the participation of 500 representatives from enterprises, domestic and international investment funds who contributed 85 per cent of Vietnam’s deal value, Vietnam M&A Forum 2019 will have these following main activities:

• The annual seminar: Vietnam M&A Forum 2019 will focus on analysing changes and barriers in policy to promote the M&A market in Vietnam, helping investors as well as domestic and foreign businesses identify sources of goods, foreign capital, and fields which will create breakthroughs, and explaining the attraction of the Vietnamese market of over 96 million people and post-M&A brand development.
• Voting and awarding for the Best M&A deals and advisory firms in 2018 – 2019: Voting to evaluate and honour businesses with exemplary deals and the best M&A consultancy units in 2018-2019.
• M&A Master Class: held on August 7-8, 2019 with the theme "M&A strategy for breakthrough growth".
• "Vietnam M&A Outlook 2019" special publication: The publication is in Vietnamese and English, offering up-to-date information about M&A activities in Vietnam as well as sharing experiences on M&A from domestic and foreign investors.