2010, the year of big M&A deals

With the efforts by the Government and enterprises, 2010 may witness merger and acquisition (M&A) deals of large caliber, especially in the industrial and financial sector.

Vietnamese enterprises become buyers

In 2009, M&A activities in the world witnessed decreases in both the number of deals and value. According to Thomson Reuters, the M&A value in the world was 1630 billion in 2009, a decrease of 39.2 percent from 2008, while the number of M&A deals was 30,830, a decrease of 10.4 percent if compared with 2008.

According to Avalue Vietnam, the number of M&A announced in 2009 increased by 230 cases, while the M&A value decreased from $1.1 billion in 2008. In an independent survey conducted by PricewaterhouseCoopers, the number of M&A cases increased slightly and the value of the cases also increased slightly thanks to the appearance of some deals at the end of 2009.

The M&A deals in Vietnam were mostly small and medium scale. Small scale deals included the ones with the transaction value of less than five million dollars, while medium scale deals referred to ones with a transaction value of $20 million on average. Meanwhile, big M&A, with big corporations, did not happen because of a lack of equity of state owned big corporations and the difficulties in selecting strategic partners.

Finance & banking and industries saw the highest numbers of M&A deals and the most important deals in Vietnam last year

In July 2009, the Bank for Investment and Development of Vietnam (BIDV) announced the 100 percent Vietnamese owned IDCC Company with the chartered capital of $100 million. In the same year, IDCC officially purchased PIB, a Cambodian bank, to form up the Bank for Investment and Development of Cambodia.

Previously, when talking about M&A deals, people always thought about foreign partners, but things have changed. Statistics showed that the number of M&A deals, where Vietnamese enterprises purchase Vietnamese enterprises, account for 40 percent of the total transaction value in the market. Meanwhile, the number of deals, where Vietnamese enterprises purchase foreign enterprises, account for 4.62 percent of the total transaction value.

2010 will be the year of big M&A deals

Experts said that the M&A performance in 2010 would depend on the recovery of the global economy, the national economy, the Government’s policies and strategies of investors.

Experts believe that in 2010, M&A activities will develop in a larger scale and higher value than in 2009.

Dang Xuan Minh, General Director of Avalue Vietnam said at the press conference on announcing the plan to organize M&A Vietnam Forum in 2010 on May 25 in HCM City that he believes that 2010 will witness some big scale M&A deals.

On January 5, South Korean Kumho Asiana announced the plan to restructure the group under which it plans to sell a part of its assets. Kumho plans to collect $1.1 billion from the sale of the assets in South Korea and overseas, including the assets in Vietnam and Hong Kong.

VCG is trying to push up the sale of the capital in Cam Pha cement project. Meanwhile, Viettel is considering two big deals, including the one on purchasing 60 percent of stakes of Teletalk in Bangladesh and the other on purchasing 70 percent of stakes of Teleco in Haiti.

Dan tri

Tags: Vietnam M&A