Legal reforms to push M&A market forward

The vibrant mergers and acquisitions (M&A) market in Vietnam is developing and the 2017-2018 period is forecasted to witness more successful M&A deals, as well as new state divestments, which is a big opportunity for domestic and international investors. Bad debts dampen M&A boom in banking industry Reforms help M&A landscape to shine Serving up an M&A feast Abundant attractive deals make huge contribution to M&A market Danang M&As help overcome delays State divestment from Vinamilk will be imlemented in October 2017 The M&A market in Vietnam reported a record value of $5.8 billion in 2016 and KPMG Vietnam even forecasted that the second half of 2017 will witness more sizable M&A deals. The reason is that the private sector in Vietnam is considering M&A an important strategy to ensure sustainable development and expansion. Also, the Vietnamese government is speeding up state divestment in a number of big firms. Thus, it is likely that more M&A deals will come in the second half of 2017 and early 2018. Below is the list of ten sizable divestment that are forecasted to be implemented during 2017-2018. 1. Vietnam Dairy Products Joint Stock Company (Vinamilk)  The Vietnamese government has approved the plan on selling more than 48.3 million Vinamilk shares, an equivalent of 3.33 per cent of…... [read more]

VinaCapital acquires $11-million stake in infrastructure construction and real estate developer Tasco JSC, making another step in its investment restructuring initiative. VinaCapital's $11 million buy-in of Tasco is a continuation of the company's strategy (Source: According to newswire DealStreetAsia, Ho Chi Minh City-headquartered VinaCapital, through its vehicle Vietnam Opportunity Fund (VOF), has acquired almost half of the stakes put on private placement by Tasco JSC, becoming a major shareholder. The company put 21 per cent of its post-investment shares up for sale, with the value of roughly $23 million. Next to VinaCapital’s sizeable purchase, Tasco’s management team and other investors also participated in the private placement, taking up smaller shares. Earlier, Tasco announced issuing 50 million new shares to investors. At the time, VinaCapital was to pick up 30 million of these shares, accounting for 12.5 per cent equity in the company. The offer price was VND10,500 ($0.46) per share, which VinaCapital called an “attractive price,” as reported by DealStreetAsia, especially in light of the VND11,700 ($0.51) the shares were traded at on August 7. “This investment is consistent with our philosophy of investing in companies that are focused on the growth of the local economy, and infrastructure improvement is a critical element in Vietnam’s on-going development,” commented Andy Ho, CIO of VinaCapital and managing director of VOF to DealStreetAsia. In 2016, Tasco reported a revenue of $124 million, with a net profit…... [read more]

In order to attract foreign investors to become strategic shareholders, a series of Vietnamese enterprises plan to increase their foreign ownership limit (FOL), some are even considering removing it altogether, promising a breakthrough in M&A activities in 2017. A number of companies are jumping on the government initiative to remove the FOL and attract foreign invesmtent According to Vu Anh Dung, vice president of Vietnam-Japan University cum head of panel of judges of the M&A Deal Awards 2017 under the framework of Vietnam M&A Forum 2017, one of the factors making foreign investors ignore Vietnamese enterprises is the low limit of foreign ownership, which is currently maximised at 49 per cent. Besides, in equitised domestic enterprises as well as large-scale private enterprises, domestic shareholders still want to hold the controlling stake. Meanwhile, when foreign investors plan to acquire domestic enterprises, they want to own a majority stake in order to join management activities as well as build development strategies and business plans. The problem has been resolved since Decree No.60/2015/ND-CP was issued. Notably, about 20 domestic enterprises have completed procedures for increasing the FOL, garnering foreign investors’ attention. In late July, Vietnam’s biggest publicly-traded drug maker Hau Giang Pharmaceutical JSC (DHG) received its shareholders’ approval to lift the FOL to 100 per cent. This decision is expected to lure in more foreign investors along with the existing big foreign shareholder Taisho Pharmaceutical Holdings…... [read more]

Vietnam M&A Forum 2017 has opened this afternoon in Ho Chi Minh City, promising lively discussions on the next breakthrough opportunities.  Le Trong Minh, editor-in-chief of VIR and head of the Organising Board, expressed his hope that the forum would contribute to the development of the Vietnamese M&A market, helping restructuring and increase the competitiveness of businesses in Vietnam. M& A Vietnam 2017 is now taking place at GEM Centre, District 1, Ho Chi Minh City. Co-organised annually by VIR and AVM Vietnam under the auspices of the Ministry of Planning and Investment, the Vietnam M&A Forum has been a major event in the M&A market in the past nine years. The theme of this year’s edition is Seeking a big push, as new challenges in 2017 may prevent the Vietnamese M&A market from reaching the $5-billion mark in deal value. A strong initiative is necessary to boost the quantity and quality of M&A deals. The forum this year has attracted 20 speakers and 500 senior leaders of government agencies, investment funds, and leading corporates from Vietnam and overseas.   In his opening speech, Minister of Planning and Investment Nguyen Chi Dung noted that the Ministry leaders highly appreciate the contribution that Vietnam M&A 2017 has made in the last nine years. This is particularly timely, as more state-owned enterprises become equitised and state divestments are getting stronger. Minister Dung said that the forum has promoted foreign investment in Vietnam through M&A, connected investment…... [read more]

While M&A may be a new and strange activity to Vietnamese businesses, to Masan, it is simply a tool to be used for developing their long-term vision. RELATED CONTENTS: KKR closes $250 million investment in Masan Group Masan begins trading on UPCoM Masan to issue $300 million non-convertible bonds to foreign investors Masan, banks lift local stocks Stocks up after Masan reveals dividend plan Masan Consumer moves to get listed on UPCoM Masan submits offer for remaining stake in Nui Phao mine owner Almost two years ago, on December 25, 2015, Masan Group issued a press release on the M&A deal with Singha from Thailand. Among hundreds of M&A deals in 2015, this was the deal that pushed the value of the Vietnamese M&A market over the $5-billion mark for the first time. The fact that a foreign company invested $1.1 billion in a Vietnamese business, which was a record at the time and remains one of the largest deals the market has seen so far, deeply impressed the business community in Vietnam. However, the stellar value was not the only thing making this deal unique. This was the first time in Southeast Asia, and perhaps even in the world, that two giants in consumer products joined forces without the usual buyout. It should…... [read more]

Minister of Planning and Investment Nguyen Chi Dung will open Vietnam M&A Forum 2017 this afternoon in Ho Chi Minh City. Minister Nguyen Chi Dung will give the opening speech at Vietnam M&A Forum 2017 today The forum is scheduled to take place at 1.30 PM today at GEM Centre, District 1, Ho Chi Minh City. Minister Nguyen Chi Dung will be joined by 20 speakers and 400 senior leaders of government agencies, investment funds, and leading corporations from Vietnam and overseas. Co-organised annually by VIR and AVM Vietnam, Vietnam M&A Forum is a major event for the mergers and acquisitions (M&A) market in Vietnam. Throughout the past nine years, the forum has been a platform for investors, corporations, policymakers, and other industry experts to meet and discuss opportunities in the booming market. The theme of this year’s edition is Seeking a big push, as new challenges in 2017 may prevent the Vietnamese M&A market from reaching the $5-billion mark in deal value. A strong initiative is necessary to boost the quantity and quality of M&A deals. At the event this afternoon, speakers and representatives from various sectors will discuss the most pressing issues of M&A in three panels: Identifying breakthrough sectors; Opportunities for foreign investors; and Lessons drawn from previous deals. All participants at the forum get a copy of the Vietnam M&A Outlook 2017 special publication, which provides quality coverage of the year’s deal trends. …... [read more]

Domestic pepper prices have been fluctuating abnormally from late July until now, with the VPA blaming price manipulating measures used by Chinese businesses. In the first seven months of 2017, Việt Nam’s pepper export volume was estimated at 145,000 tonnes and valued at $800 million, up 20.4 per cent in volume but down 18.2 per cent in value against the same period last year. - Photo On July 28, pepper prices in the morning ranged from VNĐ80,000 to VNĐ86,000 (US$3.5 - $3.8) per kilo, then dropped to VNĐ82,000 per kilo in the early afternoon. Currently, pepper prices are still bouncing up and down. Trần Hữu Thắng, a pepper farmer in the southern province of Đồng Nai, said pepper prices in the province dove sharply to VNĐ75,000 per kilo three weeks ago, however, on August 8, the prices rose to VNĐ95,000 per kilo. Some pepper export enterprises attribute this price fluctuation to Chinese traders who order large quantities of pepper from pepper exporters at any price. Then, they rush Việt Nam’s exporters to deliver as soon as possible. Under pressure to fulfill the contracts, many firms buy pepper from farmers and agents at high prices. Meanwhile, the Chinese traders contact the local pepper purchasing agents and promise to sell the pepper to them below market value. The agents agree, aiming to sell it on to exporters again. However, Chinese businesses only sell a…... [read more]

Taxi firms are bristling over a draft regulation that will place greater restrictions over their operations in the capital city. Taxis driving at Nội Bài airport near Hà Nội. - VNA/VNS Photo Huy Hùng They say the new rules will make it even more difficult for them to survive. The Hà Nội Department of Transport (DoT) is in the process of collecting feedback on a draft regulation dealing with the public transportation services by car within the city limits. City authorities believe that restrictions contained in the regulation, set to be approved by the end of 2017, are needed to exert greater traffic control. Representatives of the Hà Nội Taxi Association (HTA) and other taxi firms have responded negatively to the proposed restrictions, saying they could drive them into bankruptcy. A major sticking point for the firms is a provision that says taxis will only be allowed to pick up passengers in the area where the vehicles are registered, and will not be allowed to park or pick up passengers from elsewhere. Practically, this means that Hà Nội will be divided into two areas numbered one and two. Number one will cover districts within the city limit and number two will encompass districts in the city’s extended areas. Depending on their license plates, taxis will not be allowed to park and wait for passengers in areas that they are not assigned. They…... [read more]

More foreign investors are looking to enter Vietnam’s food and beverage market, especially via mergers and acquisitions. The food and beverage sector is the biggest target for M&As by foreign firms Photo: Le Toan According to Ly Kim Chi, chairwoman of the Ho Chi Minh City Food and Foodstuff Association, many long-standing and prestigious brands in Vietnam’s food sector have been acquired.  The association recorded a large number of its member firms being acquired by foreign players, a trend that is forecast to rise in the coming time. Some Vietnamese firms sold their business because they are less competitive than their foreign counterparts in the increasingly integrated global market. However, this does not mean that they went for fire-sale prices. In fact, some firms have been acquired for more than their real-world valuation. Chi said that foreign investors are interested both in Vietnam’s developing consumer market, and as a gateway market for foreign firms to enter the ASEAN market – a bloc with more than 600 million consumers. Nguyen Quynh Lan, managing director of the Business Information Unit at data and business information provider StoxPlus, said food and beverage is the sector of greatest interest to foreign investors for mergers and acquisitions (M&As), with a total deal value of more than $1.4 billion in 2016. Most of the active acquirers are from Singapore and Thailand. She noted that Singaporean investors are very active…... [read more]

Philippine rice tender win buoys local priceTrung Chanh Farmers load just-harvested paddy (unhusked rice) onto a boat in the Mekong Delta - PHOTO: TRUNG CHANH CAN THO – That Vietnamese rice firms won in a Philippine tender last month to supply 175,000 tons of 25% broken rice has led to a steady price increase of IR 50404 rice in the Mekong Delta. The Vietnamese winners of the tender which the Philippines held under a government-to-private importation to replenish its dwindling buffer stocks are Vietnam Southern Food Corp, Gia International Corp, Tan Long Group JSC and Hiep Loi Food JSC. Nguyen Thanh Tho, a rice trader at Ba Dac wholesale market in Tien Giang Province, told the Daily on August 8 that IR 50404 material rice sells for VND7,300-7,400 a kilo, up VND100-150 compared to July 25, while its finished rice fetches VND8,400-8,500 a kilo, up VND100-200. Local traders purchase IR 50404 fresh rice at VND5,000-5,100 a kilo on the farm, up VND200-300. Likewise, broken rice is sold at VND6,900-7,000 at Ba Dac market. The four winning bidders will deliver 120,000 tons to the National Food Authority of the Philippines within this month, resulting in an upsurge in domestic demand for IR 50404, according to Nguyen Thanh Phong, director of Van Loi Corporation in Tien Giang Province. Its price has subsequently picked up. Some enterprises said IR 50404 25% broken rice is locally priced at VND8-8.13 million (US$353-357) a ton. Meanwhile, the Philippine government purchases the staple food at US$409 to US$425.9 a ton.…... [read more]

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