Asian investors eye more M&A opportunities in Viet Nam

Friday, Dec 02, 2022 10:36

A customer buys medicines at a Pharmacity store. Pharmacity has joined SK Group, with the aim of entering Southeast Asia's rapidly expanding retail and healthcare markets. — VNA/VNS Photo

Investors from Japan, the Republic of Korea (RoK), and Singapore are looking for more potential merger and acquisition (M&A) opportunities in Viet Nam, pinning high hopes on the long-term growth prospects of the market.

According to Masataka “Sam” Yoshida, head of the Cross-border M&A Division of RECOF Corporation of Japan, Japanese companies are striving to sign strategic agreements with Vietnamese partners.

Yoshida said Viet Nam is Japanese firms' most preferred destination thanks to its economic resilience with high growth potential on the basis of the diplomatic relations between the two countries.

The Southeast Asian nation is also transitioning from production to a consumer market, he noted, adding that these favourable factors will attract more Japanese companies to the country.

In November, Viet Nam continuously recorded M&A deals from Japanese investors. Most recently, the Cool Japan Fund announced that it will pour about US$10 million into 4P Holdings - the firm that owns and operates the 4P pizza restaurant chain. This is part of the fund's strategy to exploit opportunities in the Vietnamese food and beverage market.

Meanwhile, Japanese gas supplier Toho Gas has signed a strategic investment cooperation agreement with Phuc Sang Minh Engineering Services Trade Co., Ltd to buy 40 per cent of shares of the Vietnamese gas supplier.

Similarly, Sumitomo Mitsui Banking Corporation will invest VND240 billion (over $9.7 million) in Smart Net Trading Service JSC (SmartNet).

Pharmacity, one of the largest drugstore chains in Viet Nam, has joined SK Group, with the aim of entering Southeast Asia's rapidly expanding retail and healthcare markets. The deal is believed to be one of the landmark deals of the year.

Meanwhile, SK E&S, the largest private renewable energy operator of the RoK, signed an agreement worth $37.5 million to buy a 99.99 per cent stake in New Renewable Energy JSC No.1, which is a subsidiary of Gia Lai Power Electricity JSC to set a foot in the renewable energy sector in Viet Nam.

The signing of billion-dollar deals between Vietnamese and RoK firms has shown the confidence of Korean investors in their Vietnamese partners.

Hana Financial Group has established a strategic partnership with the Bank for Investment and Development of Vietnam (BIDV). Viet Nam also witnessed the strategic investment of Shinhan Financial Group of the RoK in Tiki - Viet Nam's leading e-commerce company in May this year.

Nguyen Hanh, a lawyer of Bae, Kim & Lee Vietnam, said in the first ten months of this year, $370 million was poured into Viet Nam through M&A deals by Korean investors.

It is forecast that more and more Korean corporations will join and increase their presence in Viet Nam through M&A deals.

This year, a member investment fund of Temasek Holdings of Singapore also inked a $50 million deal with Vietnamese e-commerce solution provider OnPoint.

In addition, Singaporean venture capital funds have increased their presence in the Vietnamese market through investments in local start-ups.

Recently, Dat Bike, an electric motorbike start-up of Viet Nam, has announced that it has successfully raised an additional $8 million in a funding round led by Singapore-based Jungle Ventures Fund. GSR Ventures and Delivery Hero Ventures also participated in the round, along with Wavemaker Partners and Innoven Capital.

In August, Jungle Ventures also poured $8.5 million into local insurance and healthcare platform Medici.

Meanwhile, Golden Gate Ventures, a Singapore-based venture capital fund, has set up two offices in Viet Nam to invest in the technology industry. Another venture fund, Quest Ventures, is also partnering with Enterprise Singapore to implement the GIA Acceleration Programme to assist Singaporean tech start-ups and small- and medium-sized enterprises (SMEs) to enter the Vietnamese market. — VNS

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