Opportunities of second M&A wave

 Participants in the Vietnam M&A Forum 2014, which took place in Ho Chi Minh City recently, said the second wave of M&A will bring a number of benefits for the Vietnamese economy, especially for the equitisation of state-owned enterprises, including Vietnam Airlines and Mobifone.

“Foreign investors will pay a lot of attention to these investment opportunities. If we provide the right conditions, they will inject a large amount of capital into the national economy”, Dang Xuan Minh, deputy head of the organising board of the Vietnam M&A Forum 2014, said.

In the past, foreign investors focused on finance, banking, retail, and real estate, which accounted for over 60 percent of the total value of M&A deals, he said, adding that these sectors would continue to be attractive for investors.

He stated that for the success of a plan approved by the Prime Minister entailed the equitisation of 432 SOEs by 2015, the involvement of foreign investors will be an important factor.

According to Minh, experts said foreign investors would target major State-owned enterprises in the fields of aviation, sea ports and consumer goods.

However, they pointed to a number of barriers preventing investors from participating in M&A activities, such as the State still holding a large proportion of shares in many fields, inconsistent prices and long procedures for closing M&A deals.

Minh expressed his belief that mergers and acquisitions involving foreign investors would not only generate capital resources, but also help domestic partners increase administrative skills and improve business development strategy.

In order to effectively capture the opportunities of this wave, Vietnamese companies should follow the international administrative rules and provide transparent information for foreign investors, he noted.

The first M&A wave occurred from 2003 to 2013, peaking during the 2008-2013 period with successful transactions worth 15 billion USD.