VietNamNet Bridge – The Vietnamese M&A market heated up again in 2014 after a chilly 2013 with a higher number of deals completed and higher transaction value.

Six M&A deals reportedly were made every week in Vietnam in 2014, showing the strong recovery of the market in 2014.

IMAA, an institution which keeps watch over M&A deals globally, reported that Vietnam witnessed 313 M&A deals in 2014 with value of $2.5 billion, an increase of 15 percent over 2013.

As such, each deal had a value of over $8 million, or 12 percent higher than the previous year. This means the deals involved large and valuable corporations.

The Vietnamese M&A market only warmed up in 2007, when Vietnam officially joined the World Trade Organization (WTO). The value of the deals has been increasing gradually since then, reaching a peak of $4.1 billion in 2012. After that, the growth slowed down due to a fall in investor confidence.

The strong commitments by the government in 2014 about the equitization of state owned enterprises and administrative-procedure reform have helped restore confidence and prompted businesses to continue seeking new opportunities.

Retailing has attracted investors the most: 36 percent of the value of the M&A deals were made in the industry. The best-known deal involved BJC Group, owned by Thai billionaire Charoen Sirivadhanabhakdi, who spent $879 million to buy Metro Cash & Carry Vietnam.

The second most attractive sector was consumer goods manufacturing with 21 percent of the total M&A value. Vietnam’s largest sweets manufacturer, the Kinh Do Group, was sold to the US Mondelēz International for $370 million.

The third position belongs to the power sector, with 18 percent of value.

It was a big surprise to analysts that the finance & banking sector, which was expected to see a lot of M&A deals, turned out to be abnormally “quiet”. Unlike 2013, there were no big M&A deals in the industry in 2014, except for some small transactions.

The affairs expected by the majority of investors, including ones between Maritime and Mekong Development Banks, and between Sacombank and Phuong Nam Bank did not occur.

In early 2014, opinions from well-informed circles affirmed that GP Bank, a weak bank forced to undergo a restructuring, would be sold to a Singaporean bank. However, no new news about the deal has been reported so far.

According to IMAA, by early December 2014, the value of the M&A deals in ASEAN countries had increased by 50 percent over 2013, reaching $128 billion, the highest level since 2008.

Mai Chi