Hanoi (VNA) – Vietnam has become a favoured destination for merger andacquisition (M&A) deals for foreign investors, particularly those from theRepublic of Korea (RoK), China’s Hong Kong, Singapore and Japan as the Asianmultinationals see the benefits of having presence in one of the region’sfastest-growing economies.

RoK investors have overwhelmed M&A deals in the Southeast Asian country,the Vietnam M&A Forum (MAF)’s M&A report showed.

Conglomerate SK Group signed a billion dollar deal with Vingroup, in May toacquire 154.3 million primary shares in Vingroup and 51.4 million shares of thefirm’s Vincommerce for 1 billion USD. After the transaction, SK would own a 6percent stake and become a strategic partner of the Vietnamese real estate,tech, retail and services giant.

The company also expressed its interest to purchase additional shares of thePetroVietnam Oil Corporation (PVOIL) after buying 3.55 million shares at thefirm in 2018.

Furthermore, Shinhan Card bought Prudential Vietnam Finance Company Limited at151 million USD, while Samsung SDS has pledged purchasing 25 percent stake ofCMC, Vietnam’s leading information technology service provider.

According to the Korea Financial Investment Association (KOFIA), the Koreanfunds poured some 3.5 billion USD in Vietnam as of May, or 13 times higher thanfour years ago.

Meanwhile, Hong Kong is a noticeable investor in the first half as it landed 5.3billion USD in Vietnam.

Particularly, Hong Kong’s Beerco Limited spent 3.85 billion USD on acquiringstake in Vietnam Beverage Co., Ltd, a local unit of Thai Beverage Public Co.,Ltd.
Besides, Hong Kong investors also injected alarge amount of capital into various projects in the country.

The Hong Kong and Shanghai Banking Corporation (HSBC) said Vietnam hasbenefited a lot from the escalating US-China trade war as well as theASEAN-Hong Kong free trade agreement, which takes effect from June 11, 2019.

Hong Kong investors are seeking investment in the Southeast Asian country amidthe US-China trade tension, said CEO of HSBC Bank Vietnam Ltd Pham Hong Hai,adding stable bilateral cooperative ties coupled with implementation of thefresh agreement promise to open new opportunities for collaboration in thecoming time.

As for Singaporean investors, they are the third largest acquirers of M&Ain Vietnam with the deals totaling 1.6 billion USD during 2018-2019.

The Singaporean Government’s GIC Private Limited invested 1.3 billion USD tobuy shares and provide debt instruments for Vingroup’s Vinhomes in April. Lastyear, the fund acquired 51.9 million shares at Masan Corporation at the valueof 196 million USD.

Other renowned businesses in Singapore like Keppel Land, CapitaLand andMapletree have involved in a line-up of M&A deals in Vietnamese real estatemarket.

Particularly, Singapore has already invested in 18 out of 21 sectors inVietnam, with the processing-manufacturing cluster attracting 20.17 billion USDin 574 projects, or 40 percent of the total registered capital.

Vietnam has been an attractive destination for production firms in Asia, andthis is a good opportunity for Singaporean businesses, especially thoseoperating in electronics, garment and textile, food production, automation andlogistics, said President of the Singapore Manufacturing Federation DouglasFoo.

Vietnam’s M&A market has also welcomed a strong wave of Japanese capital,with Creed Group, Mitsubishi, Sanyo Homes, Daiwa House Group and Sumitomocontinuing M&A deals with Vietnamese property firms.

In addition, Mitsui & Co reached agreement with Minh Phu JSC to buy 35.1percent stake at the firm while Taisho spent some 147.8 million USD acquiring67 percent stake at Hau Giang Pharmaceutical JSC.

As the population will soon reach 100 million people, with the proportion of youngand middle class expanding, Vietnam will be more attractive to foreigninvestors, experts said.

In 2019 and the next couple of months, M&A deals with foreign players willbe in the fields of consumer goods, retail sale, real estate,telecommunications, energy, infrastructure, pharmaceuticals, and education.

“We believe that Asian investors, like those from the RoK, Japan, Singapore andThailand will hold the lion’s share in total M&A deals in Vietnam while themarket is witnessing investment flow from Hong Kong. We expects for largerM&A deals, especially divestment at state-owned companies,” said Directorof the AVM Vietnam Company Dang Xuan Minh, who is also head of the MAF’sresearch team.

Meanwhile, Professor Nguyen Mai, President of the Vietnam’s Association ofForeign Invested Enterprises, said “M&A deals will play increasing roles inVietnam’s FDI attraction. This means we have ‘goods’ to offer, our firms arestrong enough to carry out M&A deals with foreigners, and our businessclimate is really alluring to foreign investors”.-VNA