Believe in the future of the economy, M&A will "bloom"

VCN - Talking to Customs News, Mr. Dang Xuan Minh, representative of the Enterprise Investment and Purchase Research Institute (CMAC), co-founder of Vietnam M&A Forum, said due to the Covid-19 pandemic, M&A deals this year would be small and medium scale, and the market would witness more achievements in 2021.
believe in the future of the economy ma will bloom
Mr. Dang Xuan Minh, representative of the Enterprise Investment and Purchase Research Institute (CMAC), co-founder of Vietnam M&A Forum.

What is your opinion about Vietnam’s M&A situation?

- There are different views on Vietnam's M&A trends for the 2020-2021 period. In the 2019 report of the M&A Forum, the research team identified that the M&A market started to slow down, and it was not easy to reach the record of US$10 billion in 2018. Partly because of the divestment State capital in Sabeco in 2018, with a value accounting for 50% of the total M&A value of that year, which made a breakthrough.

However, the bright spot in Vietnam's M&A in recent years, especially in late 2019 and early 2020, belongs to private corporations, who are pioneers in seeking new M&A opportunities, as well as organizing and restructuring their businesses.

How does the Covid-19 pandemic affect M&A activities?

- The Covid-19 pandemic will be the main cause affecting M&A activities this year and probably in the first half of 2021. Many small businesses have faced difficulties, so they want to sell themselves. However, big businesses also have difficulties, so they have to spend resources to restructure their units. Therefore, I think in the second half of the year, there will be M&A deals but at small and medium scales. The sectors that are expected to continuously attract capital are retail, consumer goods production, finance and banking.

Basically, Vietnam’s market is still small, so a big deal will make an important contribution to pushing up the M&A value in the market. However, Covid-19 will greatly affect the entire process of implementation and completion of transfer sales. Therefore, although the price may be cheaper, the procedures and conditions for implementation are not easy. It may not be until 2021 that we will witness more achievements that investors, businesses and consultants are making efforts now.

Many economic organizations and experts have made optimistic comments about a wave of investment movement into Vietnam after Covid-19. In your opinion, how will this wave affect domestic M&A activities?

- Some economic experts have forecast a wave of investment movement into Vietnam after Covid-19. However, personally, it is necessary to follow a specific move in order to make an accurate conclusion about this wave. The movement of new investment into Vietnam, if it takes place, will be very good for our economy in general and indirect investment activities in particular. Indirect investment and strategic investment can also increase thanks to the direct investment wave.

There are also views that after the Covid-19 pandemic, many large and important enterprises may be acquired by foreign companies at low prices, so M&A activities must be restricted or even suspended at this time. What do you think about this issue?

- In fact, many Vietnamese large enterprises are still wholly owned by the State, or have a large percentage of state ownership, such as Vinamilk, Habeco, MobiFone, Vietcombank, and BIDV. Therefore, it is not easy to acquire these units, because large state shareholders have not made any divestment. However, I agree with some experts that in the context of domestic enterprises facing difficulties and at risk of bankruptcy due to the pandemic, some foreign companies and funds are considering buying real estate and retail businesses.

However, contributing capital and purchasing shares in businesses is normal, so let them occur naturally according to market rules. Of course, from the perspective of divesting state-owned enterprises, management agencies can carefully consider the time of holding auctions or offering, because the State divestment auctions in this period may not reach the price target and strategic partner as expected.

According to a report of Foreign Investment Agency (Ministry of Planning and Investment), in the first five months of 2020, there were 3,528 times of capital contribution and share purchase by foreign investors in the whole country, up 11.6% over the same period, the total value of contributed capital was US$2.99 billion, equaling 39.1% over the same period last year. Although the number of times of capital contribution and share purchase has increased, the scale of capital contribution was small, an average of only US$0.85 million/capital contribution, much smaller than the average scale in the first five months of 2019.

The value structure of capital contribution and share purchase in total registered investment capital also decreased significantly compared to the same period in 2019, from 45.7% in the first five months of 2019 to 21.5% in the five months of 2020.

What are the regulatory agencies' solutions to promote and increase the efficiency of M&A activities in the second half of this year and the coming years, sir?

- Firstly, the Government's economic stimulus measures will be an important driving force for economic development in general and for investment and M&A activities in particular. Businesses and investors who believe in the future of the economy will seek and implement investment opportunities, including new investments and M&A.

Secondly, besides economic stimulus measures, the completion of the legal basis for M&A activities, facilitating businesses to merge with the purpose of restructuring will contribute to promoting M&A activities of businesses and investors.

Thirdly, continuing to promote the restructuring of state-owned enterprises, including equitization and divestment of state capital in the roadmap, will create sources for M&A deals in Vietnam. The authorities need to encourage and take measures for state-owned enterprises to make information disclosure and transparency in order to facilitate investors to access information.

Thank you, sir!

By Huong Diu (recorded)/ Ha Thanh

Related News

Fiscal policy needs to return to normal state in new period

Fiscal policy needs to return to normal state in new period

VCN - To recover the economy during and after the Covid-19 pandemic, fiscal policy has been flexibly and promptly managed, becoming a solid foundation to help businesses and the economy gradually overcome difficulties. After nearly 5 years, although there are still difficulties, the economy is gradually returning to a high growth trajectory. In that context, it is necessary to let fiscal policy return to normal state.
Risks for the economy when cash flow has not yet been put in to production and business

Risks for the economy when cash flow has not yet been put in to production and business

VCN - Investment channels in Vietnam have a lot of potential, but financial and banking expert Dr. Nguyen Tri Hieu, Director of the Institute for Research and Development of Global Financial and Real Estate Markets, said that cash flow into production and business is still modest, leading to risks for the economy.
Vietnam to achieve credit rating as set target

Vietnam to achieve credit rating as set target

VCN - With the current credit rating scale, Vietnam is getting closer to the target of raising the investment rating grade by 2030 set out in the National Credit Rating Improvement Project by 2030.
Note for businesses when converting green and digital

Note for businesses when converting green and digital

VCN - Green transformation and digital transformation have been identified by businesses as a mandatory path if they want to develop long-term. However, there are many issues that businesses need to pay attention to right from the start of the transformation if they want to achieve efficiency.

Latest News

Foreign investors flock to invest in southern provinces and cities

Foreign investors flock to invest in southern provinces and cities

Foreign investors have recently rushed to southern Vietnamese provinces and cities to look for investment opportunities and locations.
New step in tracing seafood origin, meeting export requirements

New step in tracing seafood origin, meeting export requirements

VCN - Using the electronic seafood traceability application (eCDT VN) will help seafood exporting enterprises more conveniently apply for export product traceability documents (SC, CC). This will help the Vietnamese seafood industry better adapt to the trend of international integration and the demand for transparency in seafood origin of the export market.
Việt Nam

Việt Nam's pangasius exports expected to reach $2b in 2024

Pangasius export turnover in the first ten months reached $1.56 billion, an increase of 8.9 per cent over the same period in 2023.
VN’s first pharmaceutical industrial park to be built

VN’s first pharmaceutical industrial park to be built

Located in Thái Bình Province, the park is expected to provide jobs for 18,000 people when going into operations.

More News

Accelerating investment to meet "green" standards

Accelerating investment to meet "green" standards

VCN – Many businesses are implementing large-scale investments in technology, energy transitions, and production processes to meet the increasingly stringent "green" criteria set by the EU market.
US initiates investigation into pharmaceutical capsule shells imported from Việt Nam

US initiates investigation into pharmaceutical capsule shells imported from Việt Nam

Hard capsule pharmaceutical shells from Brazil, China and India are also being investigated.
UKVFTA gives advantages to Vietnamese fishery products in the UK, urging focus on quality for further expansion

UKVFTA gives advantages to Vietnamese fishery products in the UK, urging focus on quality for further expansion

To better exploit the tariff incentives from the UKVFTA, it is necessary for Vietnamese fishery producers and exporters to focus on improving quality and supply capacity to expand market share in the UK
Agricultural, forestry and fishery trade surplus value shoots up

Agricultural, forestry and fishery trade surplus value shoots up

VCN - According to the Ministry of Agriculture and Rural Development, the total export turnover of agricultural, forestry and fishery products in the first 10 months reached 51.74 billion USD, up 20.2% over the same period in 2023. Notably, the trade surplus value recorded a spectacular increase year on year.
New export and business cooperation opportunities from "dual conversion"

New export and business cooperation opportunities from "dual conversion"

VCN - According to a recent study from NielsenIQ, 16% of Vietnamese consumers consider a sustainable future as one of the important factors in their consumption decisions.
VN

VN's food processing industry struggles to improve quality and value chain integration

Despite accounting for 19.1 per cent of Việt Nam’s processing sector, the food processing industry has been struggling with major issues such as poor-quality raw materials and subpar value chain integration, said industry insiders and economists.
Approach strategy of the seafood industry when implementing UKVFTA

Approach strategy of the seafood industry when implementing UKVFTA

VCN - As one of Vietnam's strong export industries to the UK, especially when the Vietnam - United Kingdom of Great Britain and Northern Ireland Free Trade Agreement (UKVFTA) comes into effect, with a detailed information approach strategy, it has created a great driving force to promote the export of Vietnamese seafood products to this market.
Mid-November: Vietnam

Mid-November: Vietnam's trade volume matches 2023 total, eyes record-breaking growth

VCN - By mid-November 2024, Vietnam's total import-export turnover reached an impressive US$681.48 billion, equaling the full-year trade figure for 2023
Vietnamese enterprises facing challenges from cross-border e-commerce platforms

Vietnamese enterprises facing challenges from cross-border e-commerce platforms

VCN – In recent years, with the rapid development of cross-border e-commerce (CBEC) platforms, domestic enterprises in Vietnam have been facing numerous difficulties and challenges.
Read More

Your care

Latest Most read
Foreign investors flock to invest in southern provinces and cities

Foreign investors flock to invest in southern provinces and cities

Foreign investors have recently rushed to southern Vietnamese provinces and cities to look for investment opportunities and locations.
New step in tracing seafood origin, meeting export requirements

New step in tracing seafood origin, meeting export requirements

VCN - Using the electronic seafood traceability application (eCDT VN) will help seafood exporting enterprises more conveniently apply for export product traceability documents (SC, CC). This will help the Vietnamese seafood industry better adapt to the tr
Việt Nam

Việt Nam's pangasius exports expected to reach $2b in 2024

Pangasius export turnover in the first ten months reached $1.56 billion, an increase of 8.9 per cent over the same period in 2023.
VN’s first pharmaceutical industrial park to be built

VN’s first pharmaceutical industrial park to be built

Located in Thái Bình Province, the park is expected to provide jobs for 18,000 people when going into operations.
Accelerating investment to meet "green" standards

Accelerating investment to meet "green" standards

VCN - Founded in 1998, Ton Dong A Corporation specializes in manufacturing steel and coated steel products catering to various demands, from industrial and residential construction to transportation infrastructure and home appliances.
Mobile Version