Vietnam’s M&A flourishes over last 15 years

At the Vietnam M&A Forum 2023, under the theme Thriving Together, experts discussed the many opportunities and challenges facing the Vietnamese M&A market, and ways to move forward.

“M&A is not always a ‘takeover’ with negative connotations. On the contrary, many studies show that the businesses that most actively perform M&A are also the ones with outstanding growth rates,” Le Trong Minh, VIR’s editor-in-chief, said at the forum on November 28, emphasising that the M&A transaction environment is starting to develop strongly, along with government efforts to promote reforms, foreign investment attraction, and integration with the global economy.

By the early 2010s, Vietnam witnessed a continuous increase in M&A activities in both volume and transaction value, driven by the policy of promoting equitisation of state-owned enterprises and opening the door to investment in key economic sectors.

Citing multiple reports and VIR’s observations over the years, Minh noted that M&A temporarily decelerated in 2013-2014 as Vietnam’s economy began to absorb the consequences of the 2007 global crisis, then quickly picked up pace again from 2015, reaching its peak in 2017. Since 2022, along with the general global trend, M&A activities in Vietnam have also been falling into a new adjustment rhythm.

“Vietnam’s M&A market began to develop more professionally as foreign investors shifted their tendency and sought more long-term strategic investments. Many deals worth billions of USD have taken place in the 2015-2021 period,” he said. “Along with the growth in scale, Vietnam’s M&A market has also changed in quality, with domestic companies becoming more confident and professional, while foreign investors increasingly see Vietnam as an important strategic market in the region.”

According to Minh, Vietnam’s economy is going through a difficult period due to the dual impacts of external uncertainty and internal limitations. However, the country is still considered an attractive destination for international investors, and the current slowdown is just a temporary move in a broader cycle. 2023 was the year the M&A market was expected to find balance to move towards sustainable development.

“Although there are still many unknowns that need to be answered, the possibility of recovery and acceleration in Vietnam’s M&A market in the near future is clear. Especially when considering strong supporting factors, such as the implementation of free trade agreements, the transformation of the global supply chain, large investors’ favouring clean energy, renewable energy, technology, real estate, and so on,” Minh said, emphasising the need for capital, technological know-how and restructuring strategies of more and more Vietnamese businesses.

“M&A is the hand that is waiting to be extended in times of difficulty, and also a strong handshake to create synergy when times are good, bringing common prosperity to the participating parties and the whole economy,” he said.

Vietnam Investment Review