Vietnam M&A deal value up 12% to touch $5.8b in 2016

Vietnam recorded mergers and acquisitions totalling $5.8 billion through 530 deals in 2016, up 12 per cent from the previous year as sub-$20-million transactions dominated investments.

According to data shared at the Vietnam M&A Forum on Thursday,  there were only 14 deals that touched $500 million while only two crossed the $500-million mark.

The big-ticket deals of 2016 were Central Group’s $1.05-billion acquisition of Big C Vietnam and brewer Singha’s $1.1-billion investment in Masan Group.

In terms of operating sectors, consumers and retail attracted maximum M&As in terms of value at $2.5 billion followed by industrials at $1.1 billion.

Thailand was the largest acquirer in terms of investment value with the deals struck by Central and Singha (mentioned above) accounting for over $2 billion.

Investors from Singapore, South Korea, China and Hong Kong ranked among top slots after Thailand. In total, foreign investors made up nearly 80 per cent of the investment value last year.

Industry observers, however, cautioned that the momentum could not be sustained if the government failed to fast-track on stake sales in state-owned enterprises. In the first quarter of 2017, M&A activity in Vietnam slowed down to $1.1 billion in value terms.

Investors are pinning their hopes on the privatisation push in the country to breach the $5 billion M&A value mark in 2017.

If the government pushes ahead with its plans,  Vietnam could raise hundreds of millions each from stake sell-downs in Vinamilk, beer firms Habeco and Sabeco, and some PetroVietnam units.

The M&A Forum has forecast that these divestments could drive the M&A value in 2017 up to $6.5 billion.

While the scenario in Vietnam looks promising with increases in deal value and volume year by year, the market size is still small compared to regional peers. Data from the Forum showed that M&A activity in the country in 2016 was smaller than the $6.8 billion value in Philippines, while Indonesia, Thailand, Malaysia saw the values in the range of $11-16 billion, and Singapore hit $62.3 billion.

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