Opportunities ahead for businesses with the right M&A strategies

At the Vietnam M&A Forum 2023 organised by VIR on November 28 in Ho Chi Minh City, a convergence of national and international experts, policymakers, and business leaders discussed the theme Thriving together.

Opening his speech at the forum, Deputy Minister of Planning and Investment Tran Duy Dong extended his congratulations to VIR for its effort and contribution to creating, perfecting, and promoting the strong development of Vietnam’s M&A market.

“VIR’s M&A Forum has received the direct attendance of more than 7,000 leaders of domestic and foreign corporations, along with more than 500 speakers and hundreds of representatives. This annual event also helps create connections, open up new ideas, and promote the success of a series of M&A deals at different scales,” DM Dong said.

Deputy Minister of Planning and Investment Tran Duy Dong speaking at the event

Over the past 15 years, with more than 5,000 deals totalling $66 billion, the M&A market in Vietnam has become an effective capital mobilisation channel, contributing to diversifying capital attraction for the Vietnamese economy. However, in the context of low global growth, global M&A activities in 2023 are not going smoothly.

According to research by GlobalData, the total number of M&A deals as of the end of October decreased by 16.8 per cent compared to the same period last year, of which the number of deals in Asia-Pacific decreased by 11.6 per cent.

As part of this general trend, Vietnam's M&A market is also declining, especially compared to its peak in 2021, with a total deal value of more than $10.8 billion. By the end of October, according to KPMG's estimates, the total deal value of the Vietnamese market had reached just over than $4.4 billion, and it is not expected to reach the figure of $6.8 billion that was seen last year.

However, according to Dong, despite the above issues, Vietnam's M&A market still provides many opportunities thanks to its strong fundamentals.

“The government has proactively and effectively responded to the challenges,” he said.

“Investment growth drivers continue to be strongly promoted, and many key national projects have been put into operation. Foreign affairs and economic diplomacy activities also seen historic achievements, opening up new opportunities to attract foreign investment, especially in relation to technology.”

The deputy minister stressed that these are important premises for Vietnam to continue to strive.

“Right now, we have begun to see many positive signs,” he noted.

According to S&P Global's 2024 Big Picture Outlook report that was released in November, although global M&A activities have slowed down for most of 2023, there are many potential factors motivating investors.

“The Vietnamese investment market in general and the nation's M&A market in particular continue to be considered attractive by international investors, thanks to the political stability and impressive economic growth. The domestic consumer market also continues to grow rapidly,” DM Dong assessed.

He also cited that as of November 20, the total foreign investment capital registered in Vietnam reached nearly $28.85 billion, an increase of 14.8 per cent over the same period last year. Of this, capital contributions and share purchases reached nearly $5.97 billion, an on-year increase of 46.4 per cent.

Further encouraging domestic businesses to reconsider their strategies, seek new growth models, and focus on restructuring production and business activities in a more long-term and sustainable direction, he said, “Difficult times are the right moment for businesses to pivot. Many enterprises have built systematic strategies to find partners, with M&As being a preferred path.”

Another positive sign is that domestic businesses are also emerging as buyers, ready to take over assets to perfect their ecosystems.

“The opportunities are becoming increasingly open for parties to find a common fulcrum and join forces to achieve prosperity, thanks also to the assistance from the economic recovery and support policies that the government is fiercely pursuing,” DM Dong concluded.

The Ministry of Planning and Investment awarded a certificate of merit to VIR at the event

Deputy minister Dong announced at the forum that the Minister of Planning and Investment Nguyen Chi Dung has awarded a certificate of merit to VIR for the positive results that the Vietnam M&A Forum has achieved over the years, and the strong momentum it has built.

This is a notable award from the Ministry of Planning and Investment for organisations and individuals who have contributed to the development of the ministry.

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