VietNamNet Bridge – A lot of businesses keep a hesitant outlook about the merger and acquisition (M&A) which is booming in Vietnam.

Vietnamese businesses simply think that M&A means a business is swallowed by another, while they do not think that this is a business opportunity.

At a recent workshop on merger and acquisition, the owner of a consumer goods production company said that he feels very sad when hearing that the owners of some well known brands have sold the brands.

“I heard that the Saigon Paper, Diana and Xmen have been sold. It is so difficult to set up a business and develop a brand, while it is too easy to sell the brands,” he said.

This seems to be the thoughts of many other Vietnamese businesses. Doan Trong Ly, Director of AProcimex, a feed production company, who has been working in the business field for the last tens of years, said that a lot of foreign investors have been eyeing his company, but he will not sell the company, because he wants to build up strong Vietnamese brands.

“Some friends have advised me to sell the business and relax. However, I think that I build up the business not to sell it and become a worker,” he said.

“I feel deep grief when hearing that 75 percent of the enterprises in the animal feed industry are foreign invested which control the prices on the market,” he continued.

Like Ly, other businessmen keep a negative outlook to the selling of stakes to foreign partners, saying that when a business is sold, it is swallowed by another.

However, economists say that in the current conditions, when businesses face a lot of risks and difficulties, they need to take wise moves in order to survive and develop, and that M&A should be seen simply as business opportunities.

“When you can sell your assets for a good price, this is a good bargain,” experts say.

Cao Tien Vi, Chair of the Saigon Paper Corporation, which has sold 38 percent of stakes to two Japanese partners, said that selling stakes is the chosen solution which is hoped to help improve the business. He also said that the conservative views and the persisting to follow old way of thinking may lead the business to bankruptcy.

When talking about the M&A deal, Vi said that businessmen need to weigh pros and cons before making decision. If a businessman insists on not selling stakes to keep 100 percent of capital, he would make a great mistake if the business goes bankrupted later.

Besides, businesses need to think about what is better, holding 100 percent of capital of a small business, or holding 30 percent of a business which is much bigger. They should also consider if they want the business just hold a certain market share, or want the business to become the leader in the business field.

“When you hold 30 percent of capital instead of 100 percent, you will not be able to make decisions yourself, while you have to consult with other members of the board of directors. However, you gain what you pay,” he said.

Regarding the M&A deal, he said that it took Saigon Paper 3-5 years to restructure the company, re-organize production before the stakes were sold.

The two Japanese partners who bought Saigon Paper’s stakes are Daio Paper Corporation and BridgeHead investment fund. Daio is the third biggest paper company in Japan and the 21st in the world with the annual turnover of five billion dollars.

Do Anh Tu, General Director of Diana, which has sold 95 percent of stakes to Japanese Unicharm, said that he wishes to see the company become an international company whose brand gets well known worldwide.

Source: TBKTVN