M&A activities show signs of recovery

In recent developments, the Saigon Beer, Alcohol and Beverage Corporation (SABECO) said it intends to spend more than 800 billion VND (31.6 million USD) to acquire Saigon Binh Tay Beer JSC (SSB), which could bring its stake to 59.6%, equivalent to nearly 52.2 million shares, making it the parent company, if successful.

SABECO has also shown its intention to buy shares worth of 100 billion VND to raise its stake in Saigon West Beer JSC (WSB) as well as an additional purchase of another two million shares in the future.

Masan Group (MSN) has also revealed a plan to spend 200 million USD to raise its stake in WinCommerce, a retail chain of 130 WinMart supermarkets and more than 3,600 WinMart+/WIN convenience stores nationwide.

Meanwhile, KIDO has completed an agreement, raising its ownership in Hung Vuong Corporation to 75.39%, after selling off 51% stake in one of its subsidiaries, Kido Foods. Mitsui & Co has officially become a strategic shareholder in Tasco Auto, a subsidiary of Tasco. Although details have not been disclosed, it was expected to impact Vietnam’s IT and transport sectors significantly.

In the logistics sector, Viconship (VSC) recently completed the acquisition of the Nam Hai Dinh Vu Port JSC with an investment of nearly 400 billion VND, the equivalent of nearly all the charter capital of the latter.

Securities firm VIX officially became a major shareholder of PC1 Group JSC by spending nearly 400 billion VND to acquire more than 10.8 million PC1 shares, raising its total holding to 17.3 million shares, equivalent to a 5.56% stake. On July 1, Eximbank (EIB) said VIX Securities has become one of its second-largest shareholders, holding 62.3 million EIB shares, equivalent to 3.58% of its charter capital.

In the first half of 2024, a series of major deals in the real estate sector took place. Japan's Nishi-Nippon Railroad acquired a 25% stake in the Paragon Dai Phuoc Project and Tripod Technology Corporation purchased an 18-ha industrial plot from Sonadezi Chau Duc Corporation (SZC).

Market insiders said for many Vietnamese businesses, M&A remains the quickest way to scale up and expand their market. This is particularly true for smaller businesses, which benefit greatly from the resources and expertise of larger corporations. Meanwhile, larger corporations can acquire projects with a ready-made platform, workforce, and customer data at more affordable costs.

In the property market, M&A is crucial for businesses struggling with cash shortages. Facing greater cash pressure in the remaining months of the year motivates businesses to persify and become more active in pursuing M&A deals. The right deals can also enhance competitiveness as property developers prefer working together to create additional value rather than competing against each other.

Market insiders, however, said it might be a while before an effect can be felt in the stock exchange as investors have been shifting away from following sensational M&A news to carefully studying businesses’ performance and ability, as well as whether businesses can pull off those deals./.