M&A transactions to rise in 2010

Merger and acquisition (M&A) transactions are expected to rise this year, said Nicolas Audier, managing partner of Audier and Partners Vietnam LLC.

“I think now is the right time for M&A transactions in Vietnam;’ Audier said after the Malaysia Business Chamber Vietnam’s luncheon held yesterday to discuss the risks and opportunities associated with the deals.

Audier said he expected M&A transactions to increase for several reasons. First, many sectors in Vietnam are now open due to the country’s inclusion in the WTO since 2007. In addition, acquisition regulations have improved, investment procedures have been simplified and there is more equality between foreign and domestic investors. The securities market has been regulated as well.

The fact that many small and medium Vietnamese enterprises are borrowing less from banks, and more via shares and cash from offshore business, also signals a M&A boom.

Nguyen Van Nam, Ernst and Young Vietnam Limited’s tax and advisory services partner, said that acquisition through purchasing shares is common and is generally preferred by foreign investors over other forms of M&A in Vietnam. “New foreign companies are interested in buying market shares in Vietnam, so they are willing to buy Vietnamese enterprises. There are some big names from Asia, the US and Europe waiting to acquire shares of big companies in the telecom sector, including VNPT, Viettel and Vinal’one,” Audier added.

The equitisation of State-owned enterprises, including PV Gas’ plans to officially make its initial public offering (IPO) in the third quarter of this year, is a trend that should be watched carefully in M&A activities, Audier said.

To ensure safe M&A transactions in Vietnam, due diligence should be taken when checking a target company’s tax payments. Audier suggests consulting a lawyer as it is very difficult to find out real information about new and small companies.

TBKTSG

Tags: Vietnam business, Vietnam M&A