Experts have predicted a banner year for merger and acquisition (M&A) activities in 2019 thanks to recent positive developments.

Thai Beverage’s deal to buy a US$5 billion or 54 per cent stake in top brewer Sabeco has been the country’s biggest ever privatisation process so far.

According to Vice Chairman of the Viet Nam Foreign Investment Business Association Nguyen Van Toan, M&A deals surged 160 per cent to US$9.9 billion in 2018, making disbursement of foreign direct investment (FDI) hit a record of $19.1 billion in the year.

This shows foreign investors’ increasing confidence in Viet Nam as well as achievements in state divestment and equitisation.

Toan said Chinese enterprises would shift their investment strategies by pouring more capital into building plants in Viet Nam to take advantage of its integration commitments within ASEAN +, ASEAN and other free trade deals.

Despite expressing her optimism about the M&A market in 2019, Dr Nguyen Thi Viet Nga from the Academy of Finance said the sector was still facing challenges.

"As there are no full details for M&A in Vietnamese documents and laws, it is difficult for State agencies to manage and businesses to engage in the activities," she said, adding that lacking competence about the field stopped local firms from finding suitable partners.

Serving as brokers for M&A deals, securities, financial and audit companies had not performed their roles well due to limitations in regulations, human resources, professionalism and information. Nga also said opaque financial reports and overvaluation of M&A deals affected FDI attraction in the field. — VNS