Prioritising prestige in NovaGroup’s M&A strategy

Via friendly mergers and acquisitions (M&As), NovaGroup is currently restructuring and unifying subsidiaries. What business lines will be the pillars of your future operations?

Nguyen Thai Phien, deputy CEO of NovaGroup

In our development strategy for the 2021-2025 period with a vision to 2030, NovaGroup targets becoming an investment and economic development group with three main pillars: Novaland focusing on real estate; Nova Services operating in trade and services; and Nova Consumer working in agriculture and consumer goods.

In particular, Novaland will be the centre of the ecosystem with more than 50 projects nationwide. The group also plans to encroach into industrial property to attract increasing foreign investment waves in the future. In addition, to support the country’s transformation and development efforts, we expect to round out the NovaGroup ecosystem with new fields including technology and manufacturing by 2030.

We are currently exploring opportunities with tech startups and experts to help realise their dreams through our solid business platforms in the NovaGroup ecosystem. In manufacturing, we already have several production facilities to produce agricultural goods and foodstuffs. However, we are also targeting the light industry to meet the domestic demand and export goods overseas.

What stands behind these ambitious targets and in which areas does NovaGroup plan to focus M&A activities?

We will promote M&A in real estate, trade and services, agriculture and consumer goods, technology, and industry, to name a few.

The foundation of NovaGroup’s development strategy is shifting the proportion of economic sectors in Vietnam, to realign with the turning mechanism of the world economy. Its location as well as geographical and demographic endowments promise fantastic long-term development prospects for Vietnam, and NovaGroup wants to be among those unlocking this potential.

The determination of the group’s leaders and its staff is also a great motivation for us to reach higher, along with the rapid development of infrastructure in areas where NovaGroup’s projects are located. Key projects like Long Thanh and Phan Thiet airports and the North-South Expressway will increase the value of the group’s assets and will ensure ideal access to NovaGroup projects.

NovaGroup has largely been relying on M&As to complete its ecosystem. What are your criteria when seeking companions?

We have a long list of criteria but we prioritise reputable and prestigious businesses. Even more importantly, partners must be able to integrate into NovaGroup’s ecosystem and fit our long-term development strategy. A partner must become a homogenous part of our team and contributing to the development of the community and society.

In every M&A deal, both buyers and sellers look for synergies to generate mutual benefits and advantages for both sides. When we reach out to potential partners, NovaGroup makes sure we clearly communicate what we can bring to the table for their benefit, from revenue, profit, operational improvements, or access to capital.

Clearly defining our expectations will facilitate cooperation and the development of the common business and will make it easier to reach a consensus.

What has NovaGroup prepared to carry out such deals?

To achieve these deals, we must carefully prepare from human and material resources, strategies, and plans for the pre-, in-process, and post-M&A stages of a deal.

While reviewing a potential deal, we need to do extensive research to look into all aspects of a target, including not only finance but legal and tax compliance, too. However, even for the most circumspect dealers, undesired risks may arise after an M&A transaction. The partner may have difficulty adopting the new governance models, acclimate to the corporate culture, or the human resources of the two sides may not be compatible.

For successful post-merger integration, we have to be always alert to minimise conflicts and promote mutual interests.

What are the current prospects of the Vietnamese M&A market?

The M&A market here will continue to boom. Domestic players are becoming more active, showing greater flexibility, and many leading economic groups are rising to even standing alongside foreign buyers.