Vietnam's M&A market

How the Vietnam M&A market is developing

In 2023, Vietnam’s M&A market has slowed significantly. Global economic uncertainties and domestic challenges have caused this stagnation. However, experts believe the market will see increased activity in 2024.
The previous period saw several significant M&A deals. One was the purchase of a 15% stake in the local VPBank by the Japanese Sumitomo Mitsui Banking Corporation. The deal was worth about US$1.5 billion. It is also worth noting that the US investment fund Bain Capital invested US$200 million in the Masan Group’s business. This deal shows the interest of foreign participants in the local market’s consumer goods sector.
According to KPMG, the situation in Vietnam’s M&A segment was as follows:
– in the first 10 months of 2023, the total value of completed deals was VND4.4 trillion;
– there were a total of 260 deals;
– the average value of deals reached VND54.5 million.
Compared to the beginning of 2023, the value of deals at the end of the period decreased by 23%. The number of agreements also fell by 23% compared to the 2021 results.

Vietnam's M&A market-2

Outlook for the M&A sector in 2024

Despite a challenging year, experts expect the market to recover in 2024. Analysts see a stabilisation of macroeconomic conditions as a prerequisite for increased activity. Investor confidence is also on the rise.
The Vietnamese government is also making efforts to increase the country’s financial capacity. This includes the following measures:
– implementing economic reforms;
– establishing stable foreign investment flows;
– developing infrastructure;
– supporting local businesses.
All this has a positive impact and makes the market more attractive to investors.
Trung Duy Dong of the Ministry of Industry and Trade noted the high potential of Vietnam’s M&A market. This is mainly due to the focus on supporting the fundamental factors of economic development. This includes simplifying investment activities and business processes. The government intends to revise several principles for M&A transactions. Such changes should increase the attractiveness of Vietnam’s M&A sector. The issue of minimum tax, which could make deals with multinationals much easier, deserves special attention.
Experts also expect the number of asset sales and restructuring transactions of state-owned enterprises to increase in 2024. After a slowdown, new attractive deals should emerge in this sector.
According to Tong, economic reform will encourage new, exciting start-ups. Therefore, we expect to see an increase in foreign investment in Vietnam. Analysts say green energy, IT, real estate, and healthcare are the most promising sectors. M&A deals will likely increase in these sectors.