Annual M&A forum discusses industry trends

Wednesday, Aug 07, 2019 07:35

Over 500 experts and business executives attend the 2019 Vietnam M&A Forum held in HCM City on Tuesday. — VNS Photo Thu Ngan

Valuation, brand management and post-merger and acquisition management have emerged as key issues related to M&A since last year, the annual Vietnam M&A forum heard in HCM City on Tuesday.

These are also issues that the Government, foreign investors and Vietnamese enterprises need to focus on to remove barriers and identify appropriate strategies and solutions to achieve successful deals, according to delegates.

In the last 10 years M&A activities in the country have grown greatly both in terms of numbers and value, and have become an important source of funds for local companies and the economy.

The value of M&A deals during the last decade was US$55 billion.

A report at the forum said the value in 2009 was only $1.1 billion, and it jumped to $10.2 billion last year. So far this year it has been worth $5.43 billion.

M&A enable the restructuring of Viet Nam’s growing economy, including the equitisation of State-owned enterprises, boosting corporate governance standards and the competitiveness of local companies.

In 2018-19 the sectors with the largest number of M&A have been consumer goods, property, logistics, e-commerce, and retail.

If 2017 was the year of Thailand, 2018 saw sizeable capital flows from South Korea.

Foreign investors, especially from Singapore, Hong Kong, Thailand, South Korea, and Japan, remain key players in M&A in Viet Nam.

A document tabled at the forum said the process of equitisation and capital divestment showed signs of slowing down in 2018 and the first half of 2019.

The M&A market surpassed the $5 billion mark in 2014-16 but has plateaued at $6-6.5 billion.

To ensure it flows steadily at the $10 billion mark, greater efforts are required, according to participants at the seminar.

Speaking about opportunities, experts said Viet Nam’s M&A market had seen a lot of socio-political changes, such as the issuance of legal documents to attract new-generation foreign investment inflows and signing of new free trade agreements.

These developments were expected to help Viet Nam attract more foreign investment, including through the M&A channel.

However, there were still challenges from both outside and within the country, the forum heard.

Le Trong Minh, head of its organisation committee and editor-in-chief of the Vietnam Investment Review, said: “Major economies are changing their policies on international trade, and in Viet Nam some regulatory roadblocks have not been removed yet, while the quality of many domestic businesses remains low.

“Moreover, there are pending issues related to the equitisation and divestment of State-owned enterprises.”

Speakers and panellists shared their views on regulatory updates and the opportunities and challenges in each sector.

Investors and experts at the forum also shared their experiences in brand building and other post-M&A issues.

Besides the main event, there were networking activities to help investors and businesses from Viet Nam and abroad meet each other to discuss collaboration opportunities.

The 10 best deals and 10 best advisors of 2018-19 were announced.

The selection of the best deals is an annual activity at the forum, which helps enterprises and investors assess and review the development of the scale and nature of M&A activities in the past year.

The forum, titled ‘Going For Breakthrough’ this year, is organised by VIR and AVM Vietnam. — VNS

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