Speaking at the 2025 Vietnam M&A Forum held on December 9 and organized by the Finance and Investment newspaper, Dang Nguyet Minh, Head of Research at Dragon Capital Vietnam, noted that many local businesses are undergoing restructuring under pressure from large debt repayments.

While Vietnam’s corporate liquidity indicators have improved significantly over the past two years, the country still presents substantial room for distressed M&A linked to restructuring efforts.

Minh posed a question to panelists during the forum: “Has investor appetite for distressed assets changed, and which restructuring solutions are proving most effective?”

Lack of enthusiasm for ‘rescue M&A’

Binh Le Vandekerckove, CEO and Head of M&A Advisory at ASART Deal Advisory, responded by stating that few investors are interested in such deals, as the segment is often perceived as unattractive.

“Only specialized consultants and funds focused exclusively on turnaround projects are drawn to this segment,” she said.

Nguyen Hoang Long, Deputy CEO of GELEX Group, further emphasized that distressed M&A often involves problematic assets that cannot be salvaged. Many businesses suffer from not just temporary financial imbalances but also deeply rooted structural issues.

For instance, Gamuda Land Vietnam, which has carried out six M&A transactions over the past three years, has not completed a single distressed deal. All six deals were based on fair market value and agreed upon by both buyers and sellers.

When cheap doesn’t mean attractive

Nguyen Thi Van Khanh, CEO of Gamuda Land Vietnam, shared that many projects labeled as “distressed” were plagued by long-standing unresolved legal issues, pending land clearance, outdated zoning plans, or were collateral for bank loans exceeding the land’s actual value.

“These factors represent both opportunity and significant risk for investors,” she said.

Khanh stressed that foreign investors don’t prioritize price alone. Instead, they evaluate the timeline of legal milestones - such as when a project is eligible for construction and sales - as crucial factors.

Any delays beyond expected timelines can disrupt cash flows back to the parent company. This is especially problematic for listed firms with obligations to shareholders.

As a result, Gamuda Land carefully balances pricing proposals against the project's actual status. Sometimes, it is preferable to pay a premium for a project with clearer legal prospects and manageable risks.

Key considerations for distressed M&A success

Douglas Jackson, Managing Director of Alvarez & Marsal Vietnam, pointed out that it's critical to distinguish between “bad companies” and “good companies in bad situations.”

He outlined several key criteria for evaluating distressed M&A targets.

First is market position - whether the struggling company still has the ability to generate revenue, retains loyal customers, and has a recognizable brand. A company in financial distress but with strong brand equity may still be worth rescuing.

Second is industry outlook. Investors must assess whether poor performance is due to company-specific issues or a declining industry. If the entire sector is in decline, turnaround chances are slim.

Third, whether operational cost adjustments alone can solve the company’s problems.

Fourth is corporate governance, especially mid-level management, which Jackson emphasized as more critical than top leadership in a turnaround context.

“If these factors are ignored, distressed M&A deals can collapse and drive the company deeper into trouble,” he warned.

Distressed firms should act early

From the perspective of distressed companies, Vandekerckove advised against waiting until the last moment before seeking M&A advisors.

“M&A is a mid- to long-term strategy,” she explained. “A six- to twelve-month window is rarely enough to create meaningful value. Late-stage deals are merely firefighting measures and are not recommended.”

Instead, companies should stay calm and consult with advisors and stakeholders to devise the best path forward, rather than rushing into deals that may be regrettable later.

One quick way to regain investor appeal, she added, is to reassess the company’s market positioning and sales strategy. If executed correctly, a business could bounce back in 6–12 months and become a viable investment target.

Vietnam’s M&A market remains dynamic

According to KPMG, Vietnam recorded 218 M&A deals in the first 10 months of 2025, worth a total of USD 2.3 billion.

This reflects a trend of cautious due diligence and conservative valuations, particularly in industries with shrinking margins or sluggish demand.

Large-scale transactions contributed nearly USD 1 billion to the total, mostly from international investors, showing strong interest in high-quality, well-performing assets.

Following a record high in 2024, average deal size in 2025 returned to a balanced level of USD 29.4 million, signaling renewed momentum in the mid-market segment.

Domestic capital remains a critical force, accounting for over 30% of total deal value. Foreign capital remains robust, especially from Singapore, Japan, the U.S., and South Korea - countries that led many of the year’s largest transactions.

Major deals in 2025 focused on real estate, materials, finance, and healthcare. Several large transactions worth USD 1–1.5 billion are in final stages, expected to boost the market in 2026–2027.

Tran Chung