VietNamNet Bridge – The value of the merger and acquisition (M&A) deals in 2013 is forecast to be at some $4 billion, lower than the record level made in 2012. However, experts believe the M&A market would continue rising with the average growth rate of 25-30 percent per annum.

A report of AVM showed that the value of the M&A deals increased by 5 times in 2009-2012 from $1.08 billion to $5.1 billion. The foreign investors made up 66 percent of the total value of the transactions.

The affairs conducted by Vietnamese enterprises usually had the trading value of $2-5 million for each; some few cases were valued at $10-30 million.

In 2008-2010, the majority of the cases related to domestic enterprises, about 77 percent. However, since 2011, the M&A market began witnessing the big deals with the involvement of international investors.

Analysts have noted the steady increase in the number of M&A deals in which the buyers are Vietnamese enterprises, from 22 percent of total deals in 2008 to 45 percent in 2012.

The big deals with the involvement of Vietnamese big guys

The Vietnamese buyers include the Bank for Investment and Development of Vietnam (BIDV), which bought a bank in Cambodia. The military telecom group Viettel quietly conducted a series of transactions to buy stakes from the Military Bank. It also bought 18.9 percent of stakes of Vinaconex, a civil engineering company.

Masan has been well known over the last two years partially thanks to a series of M&A deals. It has bought Nuphaovica and taken over many other consumer goods brands.

The other big guys include Kinh Do sweets group, Hung Vuong Seafood, Vingroup, a real estate development firm. The observers’ and businessmen’s attention has recently driven to the big influential deals of Masan – Vinacafe Bien Hoa, Vien Dong Pharmacy – Ha Tay Pharmacy, Hung Vuong Seafood – An Giang Seafood Company.

Analysts believe that blockbuster M&A deals would be made in the near future, when more big general corporations and state owned economic groups go equitized.

In the banking sector, BIDV, after the IPO, is seeking foreign partners. In the telecom sector, the merger or equitization of MobiFone and VinaPhone, the two biggest telecom brands, would create big affairs. Especially, the equitization of the national flag air carrier would catch the special attention from the public.

Japanese creates M&A wave

Statistics showed that Japan tops the country which has businesses making M&A deals in Vietnam in both the number of cases and the value.

In 2011 and 2012 alone, Japanese investors conducted the M&A deals worth $1.5 billion in total.

Japanese tend to pour their money into two business fields – finance and consumer goods which have witnessed the strong growth in recently years.

A lot of big deals bear the hallmark of Japanese. Mizuho has become the strategic partner of Vietcombank. Unicharm bought 95 percent of Diana’s stakes. Sumitomo has bought Bao Viet insurance’s stakes, while UFJ Mitsubishi bought Vietinbank’s shares.

The M&A deals in consumer goods alone have the value reaching $1 billion, making up 25 percent of the total M&A value in Vietnam.

Yoshimitsu Onji from a Japanese research institute has noted that prior to 2011, Japanese investors conducted the deals mostly under the mode of the strategic cooperation (minority shareholders). However, from 2011 afterwards, Japanese want to buy more than 51 percent of businesses’ stakes.

VNE