M&A deals are still in vogue in Vietnam
New registered foreign direct investment (FDI) hit $8.03 billion in 2012’s first seven months, a 33 per cent fall compared to 2011’s corresponding time. And FDI for all of 2011 accounted $14.7 billion, a 26 per cent year-on-year fall, according to the Ministry of Planning and Investment (MPI).
However, merger and acquisition (M&A) activities continue to keep accelerate. Manila Water Corporation, leading water supplier in the Philippines, has just finished the $15.9 million acquisition of 10 per cent stake in Ho Chi Minh City Infrastructure Investment (CII) and a disclosed acquisition of 47.35 per cent of Kenh Dong Water Supply.
On the other hand, Thailand-based Berli Jucker (BJC) plans to acquire a trading company in Vietnam in the third quarter this year to enhance the distribution capability of its Vietnamese consumer goods. BJC has kept its acquisition target and financial details secret.
At the beginning of this year, two Japan-based companies of Sojitz and Kokubu acquired a majority stake of Huong Thuy, a Vietnamese retailer. Sojitz added more 25.99 per cent stake of Huong Thuy to raise its total stake to 51 per cent, while Kokubu acquired another 19 per cent stake.
Up to 2011, Japan became the leading investor through M&A in Vietnam with 19 deals valued at $596 million.
According to Yukio Namiki, CEO of Yoshikawa & Namiki Consulting Firm, said that the investment model of M&A made by Japanese corporations in Vietnam market would be key trend.
"Currently, Japan-based companies investing outbound is a main trend particularly supported by strong Japanese currency of Yen. Investment through M&A would be more and more popular with Vietnam being one of the favorite markets,” said Namiki.
Vietnam has been considered as future market by Japanese investors. As a result, Vietnam continued to be the destination of Japanese investors with long-term vision, said Namiki.
The M&A activity growth rate accounted 30 per cent recently and its rate would be 25-30 per cent in the coming time, according to experts joined the Vietnam M&A Outlook 2012 held by the MPI and Vietnam Investment Review in June 2012.
