Organised by Investment Review magazine and endorsed by the Ministry of Planning and Investment, the 15th M&A Forum heard that Việt Nam and the global market are now cooling down after a period of strong development.

A report tabled by KPMG Vietnam said in the first 10 months of this year there had been 265 deals valued at over US$4.4 billion, a 23 per cent decrease from the same period last year.

The average deal value was $54.5 million, indicating a shift towards strategic investments requiring greater financial capabilities.

Some 80 per cent of the value was in the healthcare, finance and property sectors.

Meanwhile, there were only three IPOs, which raised a paltry $7 million.

It might take until the first half of 2024 for Việt Nam's M&A market to reverse the decline, forum delegates said.

They attributed the global downturn to inflation and the Russia-Ukraine and Israel-Palestine conflicts.

Deputy Minister of Planning and Investment Trần Huy Đông said: “The global economy, including Việt Nam’s trade partners and investors, continues to experience low growth. Global trade recovery is slow, posing concerns about supply instability, especially in strategic goods like energy, food and semiconductors.

“The risks of public debt and risk on financial and real estate markets are rising in some countries. Increased competition in attracting investment, particularly with the introduction of a global minimum tax in some countries in 2024, is expected to redirect foreign investment flows, including through the M&A channel.

“A positive sign is that domestic enterprises are also emerging as buyers, ready to take over the assets of fellow local and foreign enterprises to enhance their own eco-systems.”

This challenging period is also an appropriate time for many Vietnamese enterprises to reconsider their strategies, seek new growth models and focus on restructuring their long-term business operations, he said.

“Many companies have developed comprehensive strategies and plans to seek partners for joint development, and M&A is a priority route.” ‘

Opportunities are increasing for all parties to find common ground and strive for prosperity with support from the Government’s robust economic recovery policies, he said.

In the last few years Saigon Coop bought 18 Auchan supermarkets, Massan bought Núi Pháo, VinFast bought General Motors Vietnam, Vonfram Massan bought H.C Starck Group’s GmbH’s vonfram platform; Massan Group bought 15 per cent of Nyobolt Ltd, TH Group bought Tate&Lyle in Nghệ An, and Thaco bought South Korea’s E-mart supermarket.

Positive signs

Despite the difficulties, policymakers and investors are still upbeat about the market thanks to positive signs in the domestic market and in the global market.

The US central bank has stopped its interest rate hikes, creating a stable interest rate environment that is likely to stimulate the global M&A market next year.

The Vietnamese investment market, especially for M&A, remains attractive for international investors due to political stability, impressive economic growth rates and relentlessly growing consumer market.

As of November this year, FDI was worth nearly $28.85 billion for the year, a 14.8 per cent increase year-on-year.

This year marks the halfway point of Việt Nam's five-year Socio-Economic Development Plan (2021-25).

Despite being affected by unforeseen and unprecedented problems, Việt Nam has achieved some significant results.

Đông said the Government has adopted a number of policies and solutions to mitigate the difficulties.

As a result, the economic situation remains stable, inflation is under control, and economic growth, while below expectations, was higher than many countries in the region and globally, he said.

Investment, consumption, tourism, and trade continue to be strongly promoted, he said.

“Opportunities arising from the global supply chain shift and interest among multinational corporations to establish a semiconductor production eco-system, aircraft component manufacturing, invest in innovate sectors, human resources training for the tech industry, and establishing international-scale financial centres in Việt Nam will strongly foster labour productivity and economic growth in both the medium and long terms.”

Experts told the forum that M&A activities continue in the technology, retail and consumer sectors, while real estate, green energy and utilities are expected to regain momentum with increased buying by Vietnamese businesses.

Việt Nam’s M&A market is projected to remain lively, particularly amid a reduction in resources which is causing many firms to restructure, divest their assets and seek investment. – VNS