Singapore leading M&A rankings

Singaporean investors are taking the lead in carrying out M&As, Photo: Shutterstock

Last week, Singaporean utility company SP Group and BCG Energy, a wholly-owned subsidiary of Bamboo Capital JSC, formalised a joint venture to invest in rooftop solar and other renewable energy projects in Vietnam.

SP will own 49 per cent of the venture, while BCG Energy will own the remainder. It sets an initial target to develop 500MW of rooftop projects by 2025 and will make an initial acquisition of 28MW of operational rooftop solar assets across eight commercial and industrial sites located in south and central Vietnam.

Last November, SP established an office in Ho Chi Minh City. Leveraging capabilities in sustainable energy and digital solutions, SP aims to create value-added solutions for its customers in Vietnam and establish its position as a leading sustainable energy solutions player in Asia-Pacific.

Likewise, Singaporean esports media company Ampverse announced the acquisition of a controlling stake in Vietnam-based esports team SBTC Esports last week. The acquisition comes at a time when esports viewership continues to accelerate globally.

Since SBTC Esports’ launch in 2018, the pro team has built one of the most engaging gaming esports brands in Vietnam and currently holds the title of the most popular team in the country. SBTC averaged over 80,000 live viewers across the entire League of Legends VCS Spring 2021 season, the highest of any team in Vietnam.

In June, Singaporean property developer Boustead Projects announced that its wholly-owned subsidiary, BP-Vietnam Development, had signed an agreement with Khai Toan JSC (KTG) for a proposed acquisition of 49 per cent interest in KBJSC, the holding company for KTG and Boustead Industrial Logistics JSC.

Boustead is envisaged to be a Vietnam development fund, co-sponsored by KTG and Boustead Projects. It will consist of 13 industrial real estate seed assets held through various special purpose vehicles and expand via further acquisition and development opportunities within an identified pipeline.

“The pandemic has brought about many challenges worldwide, and Vietnam is no different. There are certain sectors that continue to suffer greatly because of global travel restrictions and internal lockdown. With the current outbreak, which is more widespread than previous waves, even the manufacturing and export sector in industrial zones are greatly impacted with a significant number of production workers being infected and many more in quarantine,” said Seck Yee Chung, partner at Baker McKenzie.

“Having said that, and from a mid- to long-term perspective, investments from Singapore has been and is expected to continue to be robust,” Chung added. “With present stringent measures of mobility restrictions and social distancing, together with vaccines being imported and deployed in greater numbers compared to previous months, it is anticipated that the situation will turn around for the better - but of course, the question is how long that would take.”

In the meantime, Vietnam should continue to use all effort to bring in and deploy more vaccines, according to Chung.

Singaporean investors have been very active in Vietnam since the early stage of opening up the Vietnamese economy in the 1990s with a strong presence in real estate projects including commercial properties such as Sofitel Plaza and Somerset-branded serviced residences, as well as industrial zones.

Over the past few years, many Singaporean companies continue to venture into Vietnam via mergers and acquisitions. Singapore was the largest acquirer in Vietnam’s market with 529 deals worth $2.16 billion last year. As of this July, there are 193 instances of capital contribution and share purchase by Singaporean investors worth $566.58 million, according to data from the Ministry of Investment and Planning. There have been many sectors that attract Singaporean investors including real estate, production, industrial zones, logistics, and infrastructure and energy.

“This is a reflection of Vietnam being well-positioned to be a key supply chain constituent in Southeast Asia, given its geographic location, educated population and workforce, improving infrastructure - and in particular, also being party to numerous multilateral trade agreements,” Chung said, noting that Vietnam is also expected to see continued investment from Singapore in service sectors, in particular financial services as well as technology, consumer products, and retail.