M&A to spike as economy grows
There will be a wave of mergers and acquisitions in Vietnam in the next five years when the economy recovers and foreign direct investment surges, an international conference heard in HCM City on August 7.
Vietnamese and foreign experts said t it could result in deals worth a total of US$20 billion.The next five years will also see Vietnam deepen its international integration through the Trans-Pacific Partnership agreement, free trade agreements with the EU and the Republic of Korea, and an FTA with the Russia, Belarus and Kazakhstan customs alliance, and by joining the ASEAN Economic Community next year.
Deputy Minister of Planning and Investment Nguyen Van Hieu, who delivered the opening speech, said M&As have been growing rapidly in Vietmam, with the total value of deals reaching US$5 billion last year compared to a mere US$1 billion five years ago.
M&As have proven to be highly attractive to both domestic and foreign investors, he said, adding that despite the economic slowdown and difficulties due to China’s illegal placement of an oil rig in the East Sea, the country’s macro economy has maintained stability and grown at 5.18% this year.
According to the ministry, foreign investment has continued to flow in, with FDI accounting for around 25% of the gross capital formation.
John Ditty, general director of KPMG Vietnam, concurred with Hieu, saying Vietnam has been enjoying solid economic growth despite the impacts of the global financial crisis.
The Government has been actively pursuing restructuring policies to maintain economic stability and further boost economic growth, he said.
The total value and number of closed M&A deals started to slow down in 2013 and 2014 would also be a subdued year, he said. The trend is expected to pick up next year when the market sees more realistic expectations and transparency from sellers, he said.
The forum, organised for the sixth time by the Ministry of Planning and Investment and attended by 450 local and international experts from the US, Japan, and ASEAN member countries, offered state management agencies an opportunity to source ideas and inputs for improving the legal framework.