StoxPlus is pleased to introduce Vietnam M&A Research Report 2016, the 6th issue on this industry. This report presents a board range of topics, both sector-specific and cross-cutting market issues.
In addition to the M&A data mining, we also focus on M&A opportunities and capital flows into Vietnam thanks to a number of FTAs, namely Vietnam-South Korea FTA, TPP. Our M&A report utilized extracted database with over 5 years of historical data in Vietnam. In addition to data analysis, the report also relies on the authors extensive knowledge and experience in advising deals in Vietnam. We strongly believe that this report will be valuable to institutional investors, investment companies and foreign players who are considering M&A as a strategy to set a foothold or to expand your businesses in Vietnam.
Below are the most critical findings in our 6th issue:
1) Vietnam M&A continued its upward trend: Vietnam M&A in 2015 recorded 341 deals with total value of US$5.20bn. This indicates a 23.1% increase in terms of number of deals (compared to 277 deals in 2014) and 9.7% increase in deal value (compared to US$4.74bn).
2) Inbound M&A into Vietnam accounted for 46% of M&A deal value and totaled US$2.42bn in 2015, 21% lower than in 2014. There were only 98 inbound deals originated by investors from familiar countries such as Hong Kong, Thailand, Japan, South Korea, US, Malaysia and Singapore.
3) Domestic M&A was also busy with total deal value of US$2.70bn. For domestic M&A, the most favored sectors include: (i) Banks, (ii) Real Estate with 29 deals totaling US$776.7mn, and (iii) Food & Beverage with 37 deals valued at US$449.0mn. The acceleration in banking M&A was due to the financial sector restructuring as set out in Decision No. 254/QĐ-TTG. Bank M&A is expected to continue in 2016.
4) 2015 marked the year of Vietnam’s further integration into the global market with many new FTAs signed. Viet Nam concluded negotiations for four free trade agreements (FTAs), including those with the Eurasian Economic Union, the European Union, South Korea and the Trans-Pacific Partnership, during 2015. FTAs are likely to boost capital flows into Vietnam in the coming time, both in terms of trading as well as investment, including M&A activities.
5) Capital flow from Japan has dropped in recent years, but is expected to bounce back after TPP is signed. In 2015, two-way trade between Vietnam and Japan totaled US$24bn, with Vietnam experiencing a trade surplus. Due to TPP and removed tariffs, trade activities will likely increase, especially seafood exported from Vietnam and plastic products imported from Japan to Vietnam.
6) Thailand investors have been increasing investment in Vietnam for years, and are expected to do so after AEC is established. Vietnam has become a favorite investment destination of Thai firms, especially in Industrial Goods and Retail.
7) In our last issue of Vietnam M&A report, we have analyzed very detailed opportunities from privatization of SOEs. As SOE IPOs accelerated in 2015, many opportunities have been realized. During 2015, there were 104 SOE IPOs, accounting for 40.0% of 289 IPOs targeted for the year. The most active sectors for IPOs include (i) industrials, (ii) consumer goods and (iii) consumer services, accounting for 85% total IPO deals.
8) 2015 also marked significant improvement in legal framework on foreign investment, supporting M&A activities in the coming years. For on-the–stock-market M&A, Decree 60/2015/ND-CP relaxed the thresholds for foreign ownership. Depending on the target company’s business lines and its shareholders’ approval, these changes could enable foreign investors’ acquisition of up to 100% of a local company’s charter capital.