06 February 2018

Banner year as Vietnamese M&A in 2017 topped USD 10bn

Mergers and acquisitions (M&A) targeting companies based in Vietnam reached a record USD 10,397 million last year, just ahead of 2012 (USD 10,150 million) as the year was rounded off with the historic state-run auction of a majority stake in Saigon Beer Alcohol Beverage, the country’s largest brewer, to a local unit of Thai Beverage for USD 4,843 million, according to information collected by Bureau van Dijk, a Moody’s Analytics company, and the leading publisher of company information. 

Furthermore, Zephyr shows that this impetus has carried on into January 2018 as M&A in the country got off to a cracking start with a total of USD 1,168 million-worth of deals announced over the four weeks, representing a record high for the first month of a new year (for example: January 2017: USD 250 million; January 2016: USD 243 million; January 2015: USD 304 million; January 2014: USD 251 million; January 2013: USD 354 million; January 2012: USD 662 million).

Who knows what the remaining 11 months could bring: perhaps more banner results as changes to some of the country’s laws regulating competition and investment open up more business opportunities and the door to foreign investors. After all, Zephyr shows that while Vietnamese acquirors accounted for the majority of the 49 domestic deals announced in January, they were overtaken in terms of aggregate value by companies incorporated in the Cayman Islands, Hong Kong and the Bahamas or based in the US, Japan, Germany, Thailand and the UK. 

At USD 300 million, the largest M&A deal featuring a Vietnamese target in January involved the commercial lender informally called HDBank completing an initial public offering that included a pre-listing share sale of a little over a 21 per cent of its stock to 76 foreign investors at VND 32,000 apiece (USD 1.40). Among the registered subscribers were Deutsche Bank of Germany, Japan’s Credit Saison and JPMorgan Funds Asias’ JPMorgan Vietnam Opportunities Fund.

According to analysts cited in the domestic media, foreign investments by way of capital contributions and the purchase of shares are expected to increase in the future, especially considering the Communist government is likely to continue marketing its equitisation and divestment programme internationally, as well as accelerating the process to reduce its role in sectors ranging from telecommunications to shipping in order to use proceeds to tackle the budget deficit. 

© Zephyr