The figure included the 885 million USD equity purchase of Korean KEB HANA Bank for 15 percent stake of the Bank for Investment and Development of Vietnam (BIDV) announced on July 22.
Since 2018, Vietnam has emerged as a big M&A market in the Southeast Asian region with many big value deals. Total M&A value last year reached 7.64 billion USD, down 25 percent compared to 2017’s record value of USD 10.2 billion. However, if excluding the USD 5 billion deal of ThaiBev’s purchase of Sabeco’s equity in 2017, the 2018’s M&A value still increased by 41.4 percent year-on-year.
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At the Vietnam M&A Forum 2019 |
Dang Xuan Minh, General Director of AVM Vietnam, said foreign investors were seeking opportunities in the consumer goods manufacturing and real estate industries in Vietnam to capitalize on the huge market of more than 96 million people.
“At a Bloomberg’s investment conference in Thailand recently, many foreign investors expressed their keen interest in Vietnam’s market and want to seek opportunities here,” Minh told the meeting to introduce the Vietnam M&A Forum 2019 on July 23.
Their interested industries included consumer goods, retail, real estate, education and logistics, Minh said, but also pointed out the obstacles which may hinder foreign investment, including slow state-owned enterprise (SOE) equitization process, high State holding ratio in equitized companies, overvalued assets and the lack of transparency and English proficiency in Vietnamese firms.
Minh predicted the M&A value could reach USD 6.7 billion by year-end, but left open the possibility of higher value if appearing big deals like KEB HANA Bank in BIDV.
Michael DC Choi, Deputy General Director of the Korea Trade Investment Promotion Agency (KOTRA) told Vietnam News valuation was one of the biggest obstacles to seek investment in small companies in Vietnam.
“There’s no clear standard to value the company properly. You have to trust and take all risks in the deal,” he said.
After a decade of strong growth, Vietnam’s M&A market value reached nearly USD 50 billion and is predicted to enter a new era with various opportunities.
Deputy Minister of Planning and Investment Vo Thanh Thong said Vietnam was promoting M&A activities in tandem with SOE equitization in various sectors like transportation, infrastructure, food, agriculture, telecommunications, trade, services and tourism.
Thong said recent new policies such as the draft amendments and supplementation to some important laws (the Law on Investment, Law on Enterprises and Law on Securities), the draft resolution on attracting new-generation foreign investment and newly-signed free trade agreements would help lure more investment, including M&A deals.
He said the Politburo for the first time would issue a separate resolution on attracting foreign investment in the future.
Meanwhile, Le Trong Minh, Editor-in-Chief of Vietnam Investment Review, the event organizer, said Vietnam also faced challenges from domestic and international factors such as rising trade tension in the world, slow equitization and divestment of state-owned enterprise and modest local market value.
The 11th annual Vietnam M&A Forum 2019 themed “Going for breakthrough” will take place in GEM Conference Center in HCM City on August 6. The forum would assess the M&A trends in the next few years, analyze new capital flows, opportunities and driving force for M&A in Vietnam, Minh said.
Source: VNA