return icon

M&A deals could help VN businesses restructure amid pandemic

Merger and acquisition (M&A) deals will likely increase post-pandemic, which industry insiders see as a chance for enterprises to restructure their operations to be more viable.



A woman walks past a Vinmart+ in Ha Noi. A deal in which Masan acquired VinMart and VinMart+ from Vingroup helped Masan to expand its retail system. 


Data from the Foreign Investment Agency under the Ministry of Planning and Investment showed Viet Nam attracted nearly US$14 billion worth of foreign capital in the first five months of this year, down 17 per cent year-on-year. This figure included newly-registered capital, adjusted capital and capital contributions to buy equity.

There were 3,528 deals worth nearly $3 billion to buy the equity of companies, up 11.6 per cent in volume but down 59 per cent in value compared to the same period of last year.

Although the value of deals declined sharply, partly blamed on the coronavirus pandemic and falling value of companies, market insiders have predicted M&A activities will sharply increase soon.

Putting aside worries about being taken over at cheap prices, some experts have pointed out M&A could be a good opportunity for enterprises to restructure their operations, attract more capital to overcome the crisis and develop further.

Economist Dinh Trong Thinh said the COVID-19 pandemic had greatly impacted the whole economy and enterprises, especially those involved in import and export activities. Weak financial capacity has forced many businesses to seek M&A deals amid the pandemic which could be a good solution to have more resources and increase resilience to cope with uncertainty in the future.

According to Pham Xuan Anh, head of the Banking Investment Division at MB Securities JSC, M&A is an effective tool to reshape businesses and a way for firms to expand or narrow their operations to create greater value for shareholders, enhance governance and reduce risks.

Talking to, Anh cited the deal in which Masan acquired VinMart and VinMart+ from Vingroup's retail arm to expand its retail system in 2019.

The deal was considered to benefit both sides as Masan can take advantage of Vingroup's national network to achieve its goal of becoming the leading domestic retail and consumer group while Vingroup can save resources for its core activity - manufacturing and technology.

Anh said firms could use M&A to focus on a key business. Many long-established European businesses have been known for one type of product, while Vietnamese businesses tend to invest across many industries, resulting in a lack of capital and resources to develop.

M&A when ready

However, Anh also said there are always risks in this activity, so businesses should seek M&A deals only when they are ready. If business leaders still see risks and are not confident enough, the deal will struggle to succeed.

He pointed out many factors for investors to decide whether to invest in the business or not, in which the quality of assets is crucial. Asset quality is the first thing that attracts investors to a business and this is also the strength on which business can negotiate better prices with investors.

Other important factors include intangible assets like the business culture and corporate governance which are often the weakness of small- and medium-sized enterprises, Anh added.

According to Baker McKenzie, despite a slowdown in global deal-making due to worldwide economic uncertainty, Viet Nam remains active in M&A in 2020. The US law firm predicted cross-border acquisitions to dominate M&A deals in the coming years, as the country’s solid fundamentals continue to attract overseas investors.

Viet Nam is being praised for its efforts to control the pandemic. In addition, the ratification of the trade pact between the country and the EU will offer businesses greater opportunities for trade and investment.

However, economist Dinh Trong thinh has warned about the risk that Vietnamese enterprises will be acquired by foreign investors for cheap prices.

He said the State authority needs to consider a number of sectors which are susceptible to foreign acquisitions and have an adverse impact on the economy if they are sold for strict management. —VNS

Merger could tip scales in ride-hailing

Merger could tip scales in ride-hailing

The two local ride-hailing platforms be and FastGo could negotiate a merger to break the dominance of Grab in Vietnam.

Ministries merger in the spotlight

Ministries merger in the spotlight

Hoang Ngoc Vinh, former director of the Department of Vocational Training, talks of the creation of the Ministry of Education-Science and Technology.



2022 FDI report to focus on green growth, economic structure

First Vietnamese victim in Manchester fire identified through fingerprint

Partial human remains recovered from Bismark House Mill in the UK have been identified, through fingerprint analysis, as Nguyen Van Uoc, according to the Vietnamese Embassy in the UK, citing an announcement on August 12 by Greater Manchester Police.

Vietnam seeks foreign investment in medical devices production

The Vietnamese medical devices market, which is growing annually at more than 18%, relies heavily on imports, representing significant opportunities for foreign businesses, according to the Ho Chi Minh City Medical Equipment Association.

North-South express railway to seek Politburo’s approval

The Ministry of Transport will submit to the Politburo for consideration an investment policy for the construction of a North-South express rail link, which would cost up to 58.71 billion USD, this September.


Trains to increase during National Day holiday

Challenges for supermarket chains

The recent shutdown of multiple Bach Hoa Xanh (BHX) stores has been the talk of the town for the past few weeks. What prompted the leadership of this grocery store chain to come to such a decision despite the considerable growth in total revenue?

Re cakes: Phan Thiet’s specialty sweet treat

Re cake, a specialty of Phan Thiet City, Binh Thuan Province, tastes so delicious that no visitor can resist it.

A new move for open market operations

The State Bank of Vietnam (SBV) has recently made a new move regarding open market operations (OMO). Valuable papers are purchased at a competitive interest rate, instead of a fixed rate as before.

An insight into Vietnam’s indebtedness

National debt, or foreign debt, when reaching an excessive level, often leads to an economic crisis.

Nguyen eyes bigger competition after ASEAN Para Games wins

Tran Van Nguyen stands only 1.27m and has short arms and legs. But he has dominated the top podiums of many competitions.

Vietnam to have national marine spatial plan by 2030

A national marine spatial master plan is being developed, aiming to fuel the sustainable development of marine economic clusters and establish sea-based economic hubs by 2030.

Digital business lines developing well

Major tech companies are looking to expand in Vietnam, on the back of strong hardware export and IT figures for the country's telecom industry so far this year.

Vietnam targets launch of modern digital finance platform by 2025

Minister of Finance Ho Duc Phoc has signed a decision promulgating the Ministry of Finance's digital transformation plan to 2025, with vision to 2030.

Vietnam, Southeast Asia find ways to rise amid difficulties

Vietnam and the Southeast Asian region have managed to maintain economic stability and growth despite COVID-19 and the Russia-Ukraine conflict, according to experts.

CPI method of calculation is correct: economist

“Someone told me they had a feeling that the CPI is not correct. I asked them on what grounds. Scientifically, that cannot be proven,” said economist Vo Tri Thanh.