New Year Welcome 2024 highlights M&A trends

The Investment Promotion and Connection Agency under the Vietnam Mergers and Acquisitions Community, or M&A Vietnam on January 7, organised an event to review the 2023 performance and discussed plans for 2024, as well as market trends and recommendations for successful cases.

Pham Thuy Duong, chairman of the Digital Economy Council, the Ministry of Science and Technology and head of the Campaign Committee for establishment of the Vietnam M&A Association, gave the opening speech

The event attracted representatives of state management agencies and received the greetings from others, including the Prime Minister's Advisory Group, the Ministry of Home Affairs, the Ministry of Industry and Trade, the Ministry of Planning and Investment, Commercial Counsellors, embassies, along with numerous delegates, guests, and members.

Ha Tuan Anh, vice chairman of the Vietnam Marketing Association, chairman of Viewest Group and co-head of the Campaign Committee said, “Market developments and great opportunities from M&A in the current period and the upcoming time will open a new period for the interested and active in M&A.”

“The establishment of a specialised M&A association is extremely necessary,” he added.

According to Vu, M&A Vietnam has more than 20,000 members globally. During 2023, M&A Vietnam carried out numerous activities, including the establishment of the Industrial Real Estate group and then developed into the Industrial Real Estate Investment Promotion Centre (IPC M&A Vietnam) in August 2023 and piloting the operation model of the centre in cities and provinces like IPC Haiphong, IPC Ninh Bunh, and IPC Bac Ninh-Bac Giang.

Also, last year, the Legal Agency and the Renewable Energy Centre were established to support M&A activities.

Luu Quang Vu, chairman of the Board of Directors of M&A PARTNERS, vice chairman of Asia Investment Management JSC and head of the Investment Promotion and Connection Agency and head of the Organising Committee of the New Year Welcome 2024 presented the report of 2023 activities, and plans for 2024 of the agency

“We plan to organise more activities in 2024 to increase connection among members and their efficiency, such as talks, M&A café and meetings,” Vu said. “We are working actively to promote the establishment of the Vietnam M&A Association in 2024.”

During the meeting, experts and businesses joined two panel discussions about M&A trends, opportunities and challenges. In the first panel, the discussion focused on Business M&A with the participation of representatives from INMERGERS, A.G.S Consulting, and UOB.

They agreed that the M&A trend in 2024 would focus on logistics, especially the field of frozen food transportation and warehousing, and health and the tech application, specifically aimed at IT companies developing software for hospitals.

Regarding the taste of Singaporean investors in 2024, panellists said that they would prioritise finding businesses with the potential for sustainable development in the long term.

The panellists said that changing the mindset towards selling shares or selling a company at a time when business develops well, would increase the likelihood of finding potential investors and creating synergistic value through the combination of two companies.

They enterprises should not do M&A alone, but look for a consulting unit for doing M&A deals to advise them on the selling price, transaction structure, as well as assist them in preparing documents to approach investors, and negotiating necessary terms.

Vietnam is increasingly integrating into the global economy. Therefore, to participate in global M&A, Vietnamese enterprises need to have transparency in their financial flows, they recommended.

In the second panel, the discussion was about M&A in the realty sector which attracted the participation of Vu Thi Thu Ha, director of the law firm ATS; Dr. Nguyen Van Tuan from the law firm LNT & Partners; Le Dinh Chung, deputy general director of SGO Group; and Raoul Imback, deputy head of the Swiss Embassy Delegation to Sri Lanka.

According to experts, the real estate market in 2023 was really very difficult for businesses in the industry, especially the housing market. Highlights in recent times have been M&A deals related to real estate of hospitals, schools, and office buildings.

From the perspective and experience of the speakers, what leads to poor real estate M&A deals is constant price changes from the businesses. Initially, when they approached investors, they offered one price, but after two to three times of negotiations and exchanges, they increased the price, thus failing to build trust with investors, leading to unsuccessful M&A deals.

Industrial real estate gaining M&A interest Although not dominating in terms of the number and value of deals, the industrial real estate market is starting to record more interest in mergers and acquisitions from foreign investors.

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.

Investment injection bolsters real estate M&A haul The total value of merger and acquisition deals in the real estate sector reached $1.2 billion in 2023, according to the latest report from Cushman & Wakefield Vietnam.