Deal activity in the country in the first seven months of 2016 surpassed $3.2 billion, bolstered by the country’s attractive economic growth of nearly 7 per cent last year, according to Vietnamese investment authorities.
It is expected that the value will touch an all-time high record of $6 billion this year.
The capital into M&A activities in Vietnam or by Vietnamese companies has kept increasing, adding to the total of $18 billion during the past five years. Last year, it hit $5.2 billion, a 23.8 per cent rise over 2014.
“The wider economic boundary has created a new playfield, which is associated with new opportunities for both domestic and international investors,” said an executive from the local investment ministry during the annual Vietnam M&A Forum held on Thursday.
Vietnam has become member of two important free trade pacts, notably the Trans-Pacific Partnership and the ASEAN Economic Community, seen encouraging greater investment capital in the country.
Investors from Japan and Thailand led the wave of flocking in purchasing Vietnamese businesses, the forum data showed. After Thailand, Japanese companies are becoming more aggressive in making acquisitions of Vietnamese firms, according to John Ditty, head of advisory at KPMG Vietnam. The involvement of Japanese companies also included smaller players, besides big Japan-incorporated multinational companies, he added.
While Japan grabbed a handful of deals in aviation, energy and pharmaceuticals industries, Singaporean companies were interested in commercial real estate, and Thai firms kept their focus on the retail sector.
In terms of the number of transactions, domestic M&As accounted for 60 per cent of the total. However, they were mainly small ticket size deals in the region of $5 million. Meanwhile, foreign buyers typically invested from $30 million to over $100 million. Especially, some $1 billion deals were made, like the Singha financing in Vietnam’s leading consumer goods firm Masan Group and Central Group’s acquisition of Big C Vietnam.
M&A in wider economic boundaries, as the forum is dubbed, is the opportunity for companies, regardless of their originality, to create value, experts present at the event said.
The interest of foreign investors in Vietnam will continue to rise for some more time, commented Christopher Kummer, president of the Institute of Mergers, Acquisitions and Alliances.