Traditional M&A entities buoyed by positive outlook

In early September, SK Group announced the sale of a 7.1 per cent stake in WinCommerce to Masan Group for $200 million. WinCommerce is Vietnam’s largest modern grocery retail platform, with over 130 WinMart supermarkets and more than 3,600 WinMart+ stores.

Traditional M&A entities buoyed by positive outlook

By acquiring this additional stake, Masan aims to strengthen its control and drive long-term growth in its core business.

As part of Masan’s further investment, the group has secured the right to acquire SK Group’s remaining shares in WinCommerce at cost in the future. Meanwhile, SK Group has achieved a successful return on investment through the partial sale of its WinCommerce stake, while maintaining its long-term investment via an extension of the put option.

“WinCommerce is entering a stage of profitability, and we expect this to accelerate as we deliver like-for-like growth, open new stores, and drive the expansion of Vietnam’s modern trade market in the medium term. We value SK Group’s partnership in maximising shareholder value for all stakeholders,” said Masan Group CEO Danny Le.

In August, Japanese trading and investment group Mitsui became a strategic shareholder of Vietnam’s Tasco Auto. Although the deal value was not disclosed, the transaction is expected to provide a significant boost to Vietnam’s mobility sector.

Through the collaboration, Tasco Auto will benefit from world-class operational and management standards, as well as Mitsui’s global network. Mitsui will also contribute advanced technological solutions and valuable consultancy to enhancing efficiency, improving governance, and streamlining operations.

In April, Mitsui announced that through subsidiary Mitsui Oil Exploration, it would invest $560 million in the Block B gas field project in the southern province of Kien Giang. State-owned PetroVietnam holds a 42 per cent interest in the upstream business as the operator.

Elsewhere, Samsung Engineering acquired a 24 per cent stake in the Vietnamese water treatment company DNP Water in July for approximately $41 million. This move marks Samsung Engineering’s entry into Vietnam’s water and sewage treatment market.

“Aligned with the global environmental, social, and governance trend, our environmental business is positioned as one of our company’s future growth engines. Samsung Engineering plans to expedite its growth in global environmental markets, with Vietnam serving as an example of successful project execution,” said GyuYeon Kang, a representative of Samsung Engineering.

Meanwhile, the VIAC Limited Fund of the National Investment Commission of Oman is set to become a shareholder in Van Phu Invest following the conversion of bonds into shares. VIAC will convert all its convertible bonds into Van Phu Invest shares at maturity. The conversion price is set at VND35,000 ($1.40) per share, subject to adjustments specified in the bond purchase agreement.

According to market research firm Statista, the transaction value in Vietnam’s merger and acquisition (M&A) market is projected to reach $1.29 billion by the end of 2024, with an expected compound annual growth rate of 28.68 per cent from 2024 to 2025, bringing the total to $1.66 billion in 2025. The average transaction value in the M&A market is estimated at $42 million this year.

Commenting on the factors stimulating Vietnam’s M&A market, Hai Khieu, director and head of Market Research and Consulting Division at FiinGroup, said the US Federal Reserve is forecast to cut rates as inflation falls faster than expected, signalling an end to the historic tightening of monetary policy.

“With this positive outlook of low-interest rates and improved economic data, traditional investors in Vietnam, including those from Japan, South Korea, Singapore, and China, will find it easier to finance capital expenditure for overseas investments, including in Vietnam,” Khieu said.

Japanese investors are expected to increase their investments in 2024, driven by optimistic corporate sentiment, Khieu added.

“Given the bright outlook for the year, Japanese investors could make bold overseas decisions, particularly in Vietnam. Meanwhile, the ongoing trade war between China and the US, with both sides extending tariffs and curbs on critical exports like advanced technology and minerals for electric vehicles, has encouraged Chinese investors to look more towards Vietnam,” Khieu said.

M&A can prosper with the right steps The mergers and acquisitions market is poised to bounce back in 2024 after a fluctuating period, with significant anticipated deals across various industries. Le Khanh Lam, partner at RSM Vietnam, explains why Vietnam must take decisive action to converge the necessary conditions and be fully prepared for the upcoming growth period.

M&A Vietnam: Gearing up for a new era The M&A market in Vietnam at present is so much different than decades ago. As foreign investors step into a new era, understanding the intricacies of the Vietnamese market becomes paramount.

Vietnam tries to buck trends in M&A Despite a slump in global merger and acquisition transactions, Vietnam witnessed a significant uptick in large transactions in the first half of 2024, with robust deal flow in key sectors and the rise of strategic acquisitions.