2017 emerged as one of the strongest years for Vietnam. With the GDP growing at 6.81 percent and a record high FDI, Vietnam will continue to be a priority for investors in 2018. In 2017, the total M&A deal value reached a record high of US$ 10.2 billion. In the first half of 2018, M&A value reached US$ 3.55 billion, growing by 55 percent from the same period last year. By the year-end, the M&A market is forecast to reach US$ 6.5 to US$ 6.9 billion.
M&A Deals
ThaiBev’s acquisition of a 54 percent stake in Vietnam’s largest brewer, the Saigon Beer Alcohol and Beverage Corporation (Sabeco), was the largest deal in 2017, estimated at US$ 4.89 billion. In addition, there were other large ticket deals as well in 2017.
- Singapore’s Jardine Cycle & Carriage Limited Company completed the purchase of an additional 12.8 million shares, about 0.9 percent of Vietnam Dairy Products JSC (Vinamilk). The purchase takes their aggregate stake to 8.9 percent in Vinamilk. The total capital spent in the acquisition was over US$ 1 billion;
- South Korea’ CJ Group, acquired two business under Vietnam’s biggest logistics firm Gemadept. The group acquired 50.9 percent stake in Gemadept Logistics Holding and Gemadept Shipping Holding, totaling $85 million; and
- Vietnam’s tech firm FPT Corporation sold 47 percent of its subsidiary, FPT Trading to Taiwan’s Synnex Technology International Corporation. In addition, it also sold a 30 percent stake in FPT Digital Retail to funds managed by and associated with Dragon Capital and VinaCapital.
Major Sectors
Real estate has emerged as one of the most attractive sectors for foreign investors. With the government prioritizing infrastructure development; residential, offices, retail, hotel, and industrial parks have seen increased investments from Japan, Korea, Singapore, and China as well. Foreign investors in the real estate sector prefer joint ventures rather than acquisitions, as local players have land assets and are well connected with local authorities, while foreign investors have the much-needed capital and technical expertise.
Apart from real estate, other sectors such as retail, consumer goods, and industrial goods have also seen an increase in M&A activities. Irrespective of the industry, investors usually focus on the leading companies as they have a dominating market share and strong brand value.
This text is part of a more complete analysis available for free.
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