M&As in Vietnam likely to boom in 2011

In the latest report on acquisitions and mergers (M&As) in Vietnam, the company PricewaterhouseCoopers forecasted that the operations would likely be still busy and reach a high value and large number of successful deals on the ongoing economic basic and market, the Thoi Bao Kinh Te Saigon (Saigon Times) magazine said.

The firm said many foreign enterprises are paying much attention to investment opportunities in Vietnam’s market and M&A is one of channels what these companies aim at to access the market quickly.

In 2010, operations of investment funds focused more on sales rather than purchase because some funds started to divest capital with an aim to ensure a good performance.

The collapse of Vinashin’s debts resulted in the situation that state-owned enterprises had to restructure their operations and investment, therefore, PricewaterhouseCoopers predicted some state groups would transfer assets and stocks in their non-core investment fields. High lending rates and issues in liquidity will also force domestic companies to rely on M&A channel to meet the capital demand.

Citing the PricewaterhouseCoopers report, investments of foreign companies through M&As in Vietnam will take place in many fields, but manufacturing will see busy M&A operation because of Vietnam’s good economic growth.

Under current regulations, banks must raise minimum charter capital to 3 trillion dong and due to the higher competition, they are forced to search for foreign investors to ensure capital demand and access technology and experience. Thus, banking and finance will be a potential sector for M&A.

Fast moving consumer goods (FMCG) also is in the list of leading sectors for M&As because the demand of domestic goods consumption is growing rapidly and more and more people are joining the medium-class group.

M&As in the infrastructure sector are expected to increase in 2011 because Vietnam’s demand of investment capital for power, bridge, road, and port projects is very huge in order to maintain the country’s economic growth and the government gave high priority to attract capital sources for infrastructure development.

Real estate, retail and education also are listed in the attractive sectors for M&A operations, according to PricewaterhouseCoopers report.

Last year there were 345 M&A deals in Vietnam with trading value of nearly $1.75 billion, against 295 deals and $1.1 billion in the previous year.

Tags: Vietnam business