Vietnam’s M&A market expected to rebound next year

Speaking at Vietnam M&A Forum 2024 held by VIR on November 27, Nguyen Duc Tam, Deputy Minister of Planning and Investment, said, "Among the economic achievements of 2024, attracting foreign investment remains a bright spot. In the first 10 months of 2024, Vietnam has attracted nearly $27.3 billion in foreign capital, up 1.9 per cent against the previous year. Additionally, disbursed foreign direct investment (FDI) reached about $19.6 billion, up 8.8 per cent on-year."

Many large projects in the energy sector, such as the production of batteries, photovoltaic cells, and silicon bars, along with component manufacturing, and electronics received new investment and expansion. Vietnam boasts many advantages in sectors like semiconductors, AI, and clean energy.

However, Vietnam’s merger and acquisition (M&A) market is experiencing a slowdown. In the first 10 months of 2024, Vietnam recorded only 2,669 capital contributions and share purchases valued at $3.68 billion, falling 10.4 per cent and 29 per cent, respectively.

Tam said, "We assess the slowdown is temporary and in line with the overall global trend. The world economy has yet to fully recover post-pandemic and from the recent geopolitical turmoil. Vietnam is considered a safe, attractive, and potential market by foreign investors, a place where they can place their trust in growth potential as well as investment opportunities."

The National Assembly's (NA) recent resolution on the socioeconomic development plan for 2025 set an objective for next year to be a year of acceleration and breakthrough to achieve the highest results of the five-year development plan between 2021 and 2025. The NA has set next year’s GDP growth target at 6.5-7 per cent, asking for efforts to achieve 7-7.5 per cent.

The goal demonstrates Vietnam's determination to restore and develop its economy sustainably. However, there are many challenges to achieving this amidst the uncertainty in the world and regional situation. Many major economies like the US, China, and the EU are forecast to face many difficulties and risks in terms of growth and macroeconomic stability.

Vietnam's economy is forecast to continue to maintain positive growth momentum. Institutional and legal factors that were improved in 2024 will have a clearer impact on economic development in 2025. To facilitate the goal, the NA has proposed 12 groups of tasks and solutions for the socioeconomic development plan for 2025, including drastic actions to remove legal bottlenecks.

"I believe that when the proposed solutions are implemented drastically and effectively, Vietnam's economy can make a breakthrough and accelerate to reach the finish line in 2025. This will be an important foundation for Vietnam to continue to draw in FDI and investment through M&As," Tam said.

"Once the economy recovers, foreign investment flow will accelerate into Vietnam; combined with the growth of domestic enterprises, M&A activities will also be strongly activated," he added.

Home firms make M&A presence felt In the first nine months of 2024, Vietnam’s mergers and acquisitions (M&A) market recorded notable achievements, with deal value surging by 45.9 per cent on-year, despite an 11.6 per cent decline in transaction volume.

The 16th Vietnam M&A Forum: A Blossoming Market After a period of stagnation, Vietnam’s M&A market is now on a strong recovery trajectory, with major deals starting to re-emerge.

Wide M&A prospects for ASEAN players Supported by an influx of capital from developed economies, Southeast Asia now stands as a strategic hub for international investors exploring growth opportunities. Despite this appeal, the market presents specific challenges that necessitate careful navigation. Nonetheless, the momentum in the Southeast Asian merger and acquisition (M&A) sector reflects a resilient and optimistic outlook, signalling strong potential for sustained investment returns.