When Japanese come and buy

Analysts are witnessing a movement of Japanese investors coming to Vietnam and seeking to purchase Vietnamese companies. They say the current Vietnam’s gloomy economy is getting pinkish with the color of Japanese cherry blossoms.

Came, saw and bought

In early 2012, Ezaki Glico, a Japanese sweet and food manufacturer, bought 14 million shares, or 10 percent of stakes of Vietnamese Kinh Do Group, a preparation step to bring Glico’s products to the Vietnamese market.

Also in January 2012, Mizuho bank would complete the disbursement of the 567 million dollars for the affair in which the Japanese bank bought 15 percent of Vietcombank’s stakes.

The investors from the land of cherry blossoms have been seeking to buy stakes of the companies in different business fields, from finance, real estate to communication and consumer goods. 25 percent of Nutifood’s stakes, 48 percent of Saigon Paper’s and 57 percent of a food company, 95 percent of Diana have been sold to Japanese investors.

Opinions from the well informed circles say that the list of Vietnamese companies to sell stakes to Japanese investors would be longer in 2012, including the consumer good manufacturers in difficulties, the real estate firms which have been bogged down in debts, and unprofitable securities companies.

However, Japanese would not only look for the companies in distress, but also for the profitable ones, including the companies in the retail, healthcare or logistics industries.

Experts say Japanese have every reason to flock to Vietnam to buy companies at this moment. Vietnamese companies are facing big difficulties with sky high interest rates, while the gloomy stock market has made businesses cheaper.

Meanwhile, Japanese investors are also facing difficulties themselves: the Japanese market has become saturated, while the yen has been appreciating, which has forced them to look for new markets.

Tama Home, a housing development group with the turnover of 1.8 billion dollars per annum, came to Vietnam and purchased 20 percent of stakes of Cotec. The affair shows the way Japanese investors prefer to follow: instead of building factories in Vietnam, they join hands with domestic partners to save money and time.

According to Nguyen Cong Ai, Deputy General Director of KPMG, Japanese investors always consider the information about the market, the economic growth rate and the income per capita before investing in some countries. The investors tend to inject money in potential business fields in long term investment strategies. They do not make investment just to settle the temporary current difficulties.

Defensive measures needed?

Japan is now a favorite destination for Japanese. Therefore, in some affairs, Vietnamese companies were paid very high.

“When strategic investors want to buy shares in big quantities in order to obtain the right to manage enterprises, they would be ready to pay high,” said Le Minh Tam, General Director of Kim Eng Vietnam, a securities company.

Meanwhile, it seems that Vietnamese companies try to keep cautious in the affairs. They are under a pressure and wavering between standing their ground to survive or seeking capital from outside to develop.

If they choose the former way, this means that they may continue bogging down in difficulties. Meanwhile, if they look for strategic partners, they fear that the firms would be swallowed by foreign investors. The pressure is really hard because Vietnamese companies do not have enough information to assess the foreign partners in both experiences and investment purposes.

Tam also said that at first, foreign investors buy stakes of Vietnamese companies just to have more favorable conditions to penetrate the market. However, later, they may change their minds and make a further step by buying more stakes of the companies to hold the controlling stakes.

However, despite the fears, choosing Japanese partners still seems to be a reasonable solution for now.

Source: TBKTSG