Opportunities for M&A in a volatile market

At Vietnam M&A Forum 2022 with the theme of “Activating new opportunities” took place on 23/11, organized by Investment News in Ho Chi Minh City, experts said it is the right time for investors to acquire attractive projects with more reasonable asset valuation.

According to the Organizing Committee, after the sublimation period, the global M&A market is going down. The latest report of GlobalData said, the worst global M&A activity takes place in Q3/ 2022 with deal value decreased 48% compared to the same period in 2021.

In such common context, the M&A market in Vietnam also stays quieter than in 2020 and 2021. Data from KPMG shows that the figure falls down from US$ 11 billion in 2021 to 5.7 billion in the first 10 months this year, decreased 35.3% over the same period in 2021. The value of deals was also lower, from an average of US$ 31 million per year in 2021 to 16.5 million in 2022.

However, according to experts, the quiet M&A market does not mean that it will fall into a state of “hibernation” in the near future. Certain enterprises might make positive moves, break the ice and soon bring the market back to a vibrant state. Moreover, this time is said to be an opportunity for investors to acquire attractive projects with more reasonable asset valuations.

Deputy Minister of Planning and Investment Tran Quoc Phuong stated investors still place their faith in solutions on pandemic prevention, macro economy management as well as efforts to improve the investment and business environment of Vietnam Government. This will be great driving force for Vietnam’s economic growth in 2023 and also for Vietnam’s M&A market development.

Mr. Bui Ngoc Anh, Director of VILAF Law Firm – Hanoi Branch, expressed the experience in M&A since 2020 shows that the Covid-19 pandemic has caused enterprises and investors to encounter difficulties and obstacles. However, many M&A deals are successful this time as it brings mutual benefits for both sides.

Notably, with 93 M&A deals completed in the first 10 months of 2022, Vietnam enterprises have become the market leaders with US$ 1.3 billion, an increase of 10% over the same period last year. Deals associated with names such as real estate, Novaland Group has received an investment of US$ 250 million from Warburg Pincus, an international private investment fund; energy sector, Xuan Thien Group signed a contract with a well-known renewable energy supplier headquartered in Madrid, Spain to purchase two solar power projects in Ninh Thuan with a total capacity of 200MW for US$ 284 million; non-essential consumer goods sector, Sherpa Company Limited, a subsidiary of Masan Group, acquired 65% capital of Phuc Long Heritage Joint Stock Company for US$ 260.6 million.

On the other hand, according to Mr. Steven Brown, Sales Director of Vietnam Institutions (Mirae Asset Securities), “The scale of M&A deals is getting bigger and trading opportunities have never been as diverse as today. Vietnamese people are also becoming stronger, environmentally and energy-conscious, financially independent and health-aware. Accordingly, M&A opportunities in these fields are in high increase”.

The captioned signs show that M&A market in Vietnam is forecasted to remain active, especially in the context of tightened domestic capital, many enterprises are forced to restructure and call for investment due to financial pressure.


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