Dung said at the dialogue between Prime Minister and businesses on May 9 that Vietnam’s GDP growth rate of 3.82 percent in Q1 is an encouraging result in the context of a possible minus 3 percent growth rate this year for the global economy, as predicted by international institutions.

Minister of Planning and Investment Nguyen Chi Dung

Vietnam could export $83 billion worth of products, an increase of 4.7 percent over the same period last year and obtain a trade surplus of $3 billion.

However, the pandemic has dealt a strong blow on Vietnam’s businesses. An MPI survey in late April found that 86 percent has been adversely affected by Covid-19.

The revenue of enterprises in Q1 dropped sharply to 74.1 percent of the same period last year, while the figure is believed to drop to 70 percent by the end of April.

“More M&A deals may be made in the time to come and I am afraid that Vietnam’s potential businesses may be taken over by foreign investors at low prices,” Dung said.

Covid-19 places difficulties for enterprises and makes them more vulnerable, thus paving the way for foreign investors to acquire them. 

Covid-19 places difficulties for enterprises and makes them more vulnerable, thus paving the way for foreign investors to acquire them.

The statistics about foreign investment in the first four months of the year showed the unusual increase in number of M&A deals.

While the number of projects invested under the mode of FDI decreased by 10 percent compared with the same period last year, the number of deals of foreign investors buying into Vietnamese enterprises increased by 33 percent.

As of April 20, foreign investors has implemented 3,210 deals of capital contribution to Vietnamese enterprises, which was 3.3 times higher than the number of registered FDI deals.

These included 2,600 share purchase deals and 580 other deals.

Analysts noted that Japanese, Chinese and South Korean investors were the major buyers with the total number of deals increasing by 40 percent. Japanese bought $743 million worth of shares, followed by South Korea ($356 million), Singapore($333 million) and China ($230 million).

Foreign investors are mostly eyeing enterprises in the processing and manufacturing industry (822 deals, valued at $1 billion), wholesale and retail, and automobile and motorbike repair (1,000 deals, $500 million).

The Vietnam Chamber of Commerce and Industry (VCCI) has also expressed its concern about the possibility of Vietnam’s businesses being acquired by foreigners. It has asked the government to temporarily stop M&A activities in an effort to prevent foreign enterprises from swallowing up Vietnamese enterprises.

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