There are huge opportunities across ASEAN for mergers and acquisitions in almost every sector, particularly in Viet Nam, though challenges remain like regulatory hassles and how to add value to companies after inking an deal, experts told a seminar on M&A in HCM City on Friday.
M&A activities are increasing across Southeast Asia, capitalising on the investment boom in the emerging markets in the region, Theng Bee Han, president of the Malaysia Business Chamber Viet Nam, said.
There were a lot of M&A activities in Viet Nam last year, particularly in the real estate sector where transactions amounted to nearly US$1.5 billion, he said.
The deals involved major players from Japan, South Korea, Malaysia, Singapore and mainland China, he added.
“Viet Nam, Malaysia and [generally] ASEAN’s wider integration with the global economy offers many new opportunities for M&A.”
Ralf Pilarczyk, head of M&A for ASEAN, Standard Chartered Bank, said last year there were over 4,200 global cross-border M&A transactions valued at over $100 million and they were totally worth $5.1 trillion.
North America and Europe accounted for 76 per cent of the global deals (by value) and the Asia Pacific for 18 per cent, driven by China.
ASEAN accounts for 9 per cent of the world’s population and 2 per cent of global M&A. The bloc saw 116 deals worth $78 billion last year, including four deals in Viet Nam valued at $6 billion.
Research by Pilarczyk and Tina Tejwaney, an M&A expert from his bank, found that some of the main drivers for Viet Nam’s M&A deals are its market size with more than 90 million people, strong growth prospects and the Government’s strong efforts to push for State firms’ equitisation.
“Privatisation is an extraordinary programme,” Pilarczyk said.
It provides tremendous opportunities for foreign investors to buy into the Vietnamese economy across various sectors, and Viet Nam would have huge opportunities to develop its capital market and attract foreign investment, he said.
But the country needs to adjust its regulatory framework in the next few years to engage foreign investors better in accessing information and negotiating deals before they invest.
"Bridging ASEAN" was hosted by Standard Chartered Bank in collaboration with the Malaysian Business Chamber Viet Nam and Singapore Business Group.
The seminar attracted more than 100 business executives from Viet Nam and other countries. The bank held a bridging event last May. — VNS