Tran Kim Oanh, director of Vietrade’s Centre for Industry and Trade Investment Promotion at MoIT, said that the list of the 10 enterprises to be divested by MoIT in 2018 includes a lot of many big names.
Specifically, MoIT is expected to divest at least 24.86 per cent from Petrolimex, 46.75 per cent from Vietnam Electricity Construction Joint Stock Corporation (VNE), 63.54 per cent from Machines and Industrial Equipment Corporation (MIE), 53.48 per cent from Vietnam National Textile and Garment Group (Vinatex), and 57.92 per cent from Vietnam Steel Corporation.
In addition, the list contains firms from various sectors, such as Foreign Trade Freight Forwarding and Warehousing JSC (Vietrans), General Import-Export and Construction JSC, Vietnam Plastic Corporation (Vinaplast).
Investors are specifically interested in sector-leading enterprises like Petrolimex, Vinatex, TVN, and bigger corporations. However, according to the representatives of MoIT, the remaining firms on the list are all operating in highly potential sectors, including processing and manufacturing, construction, agricultural and fisheries production, as well as warehousing and logistics.
Regarding the 2018 M&A market, Nguyen Quoc Viet, deputy general director of AVM Vietnam which provides professional services on investment and business, pegs high hopes on the M&A trend in the industrial sector and said that M&A activities are abuzz, posting significant figures.
According to Viet, the industrial sector including material industry ranks 2nd among top 5 sectors leading M & A markets in 2016 and 2017 in Vietnam. Notably, 2016 saw 269 M & A deals in large and small scales deals with a total value of $1.1 billion, of which 118 deals took place in the consumer goods and retail sector. Estimated total value of M & A deals in 2016 is $ 5.8 billion.
“Loosening the ownership limit for foreign investors at public companies will enable the M&A market, especially in the industrial sector,” assessed Viet.
Nevertheless, according to Vu Ba Phu, director general of Vietrade under MoIT, there exist shortcomings in the quantity and nationality of investors taking part in the M&A market as almost all foreign investors come from Asia (mainly from Japan, South Korea, and Thailand), keen on taking a slice from the growing consumer goods, financial services, distribution, retail, construction material, and chemicals sectors.
However, North American and European investors have only taken part in such fields as oil and gas as well as consumer goods. Thereby, it is necessary to spur promotion activities and attract investment from these regions.