Statistics from KPMG Vietnam showed that in ten months of 2021, Vietnam’s M&A market attracted 8.8 billion USD, increased by 17.9% and 13.7% compared to 2020 and 2019, respectively.
Of which, 58% of the total value of M&A deals comes from consumer staples, real estate, and finance industries. The proportion of M&A value in which Vietnamese enterprises are buyers tended to increase, with a 1.6 billion USD worth of deals made by domestic investors.
Consumer staples, finance, and real estate are the sectors that attracted the most M&A deals, accounting for 55-60% of total transaction value in recent years, and this trend is likely to continue in the future. Major M&A deals have taken place in 2021. For example, Sumitomo Mitsui Financial Group invested 1.3 billion USD in FE Credit, SK South East Asia Fund invested 410 million USD in Vincommerce, Baring and Alibaba poured 400 million USD into CrownX.
In general, many experts stated that M&A activities in Vietnam will continue to be exciting and increasing when it is still considered a market with great potential. At the same time, the legal corridor for investment and business activities is also constantly being improved, including M&A activities, which will create more favorable conditions for businesses to participate in this activity.
Previously, M&A activities were mainly driven by foreign investors, specifically from Thailand, Singapore, Japan, Korea, and Taiwan. However, in the last few years, the market is witnessing a shift in Vietnamese companies as they become more and more active in M&A activities. M&A deals in Vietnam will continue to increase in 2022, as domestic companies are favoring this activity.
NovaGroup is one of the five enterprises with many notable M&A activities in the Vietnamese market, both in value and quantity in the past two years. Novaland of NovaGroup is a big name in Vietnam’s real estate market. Therefore, NovaGroup making M&A deals to enlarge their land funds has long been a familiar scene to investors. However, in recent years, NovaGroup has also been making M&A deals in other sectors, such as F&B.
Bamboo Capital Group (BCG) is another Vietnamese enterprise that has been boosting M&A activities. In 2021, despite the complicated progression of COVID-19, BCG succeeded in two major M&A deals. One of which is a deal in the finance–insurance sector. The other is in the field of renewable energy.
In August 2021, BCG established BCG Financial - the 5th piece of the Group, aside from the four main business segments that are manufacturing, infrastructure, real estate, and renewable energy. BCG Financial also had the first deal, M&A, of AAA Insurance Company, with an ownership rate of up to 80.64%.
On December 5, BCG Energy officially signed an investment cooperation agreement in renewable energy projects with this partner with a project with a total capacity of more than 100 MW. Accordingly, BCG Energy successfully raised 43.6 million USD from Leader Energy in the form of convertible bonds to invest in BCG's renewable energy segment.
NovaGroup and BCG are just two among many companies that contributed to a very active M&A market in Vietnam in 2021. The report of the KPMG auditing company shows that, in the first ten months of 2021, domestic investors have shown strong participation in M&A activities with 133 transactions made, accounting for 1.6 billion USD in the total value of M&A deals in Vietnam.
The Deputy Minister of Planning and Investment said that M&A in Vietnam is still an attractive market because, in the future, Vietnam's investment environment will improve markedly to meet the FTAs which Vietnam actively participates in, such as the EVFTA, RCEP, CPTPP, etc. That will contribute to leading foreign investment flows, including investment through M&A activities into Vietnam.
Masataka “Sam” Yoshida, Global Director of Transnational Merger and Acquisition Services, RECOF Corporation, General Director of RECOF Vietnam, affirmed that the wave of Japanese companies conducting investment procedures in Vietnam is forecast to increase sharply when the distance barrier is removed. There are many deals ready to be signed online.
Infrastructure construction, logistics, consumer retail, and clean energy are the fields that will attract Japanese investors.
Meanwhile, Korean investors are interested in the e-commerce, financial technology, and logistics fields. Mr. Warrick Cleine, President and General Director of KPMG Vietnam and Cambodia, stated that since Korean companies have high expertise in said fields, they believe they can contribute to the development of partners in their value chain and the market in general.
In addition, the sectors that Korean investors still pay much attention to include finance, automobile, auto insurance, construction, and real estate.
The banking, real estate, and consumer sectors will maintain their appeal in 2022. Attractive new industries in the coming years are forecasted to be renewable energy, pharmaceuticals, telecommunications, and infrastructure.
Compiled by VietnamCredit