Data showed that the total numbers of M&A deals and value in Vietnam surged sharply by 22 percent and 15 percent annually, respectively, in the 2007-2017 period.The country’s M&A market hit over the US$10-billion landmark for the first time last year, up 78 percent against the previous year. M&A value in the country continued to rise 55 percent year-on-year to reach US$3.55 billion in the first six months of this year.
The acquisition of Sabeco by ThaiBev was Vietnam’s largest M&A deal last year
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Bao Viet Securities Co (BVSC) has so far successfully consulted on big M&A deals, such as the divestment of state-owned Saigon Beer Alcohol and Beverage Corporation (Sabeco) with the offering value of VND109.97 trillion (US$4.78 billion), or the merger of Bien Hoa Sugar Joint Stock Company (BHS) and Thanh Thanh Cong Tay Ninh Sugar Joint Stock Company (SBT) with a value of VND9.87 trillion (US$429 million).
Tran Hai Ha, director of Military Bank Securities Co (MBS), tipped that his company had consulted M&A deals in oil and gas, transportation, seaport, hospital, food and beverage, basic materials, energy, finance and insurance.
Not only provides consultancy for local companies has MBS also conducted M&A consultancy contracts for foreign groups and investment funds in their search for investment opportunities and cooperation with Vietnamese businesses.
Khong Phan Duc, general director of VietinBank Securities Co, said that his company has implemented hundreds of consulting contracts per year for firms under the umbrella of the Ministries of Industry and Trade, Construction and Transport.
Among the deals, VietinBank Securities has consulted for a domestic investor to acquire a port project valued at over US$16 million besides a M&A deal in a real estate project worth US$100 million for a foreign investors. The company is also arranging the sale of a mineral processing plant worth over US$50 million.
Other securities companies such as Viet Capital Securities and VPBank Securities (VPBS) have also gained significantly from the M&A consulting services.
VPBS, for example, reported a revenue of over VND280 billion (US$12.17 million) from financial consulting services last year, up 79 percent over the previous year.
Promising market
According to Tong Minh Tuan, director of Vietcombank Securities Company (VCBS)’s Ho Chi Minh City branch, the opportunities for securities companies in the M&A consulting segment are very promising.
Accounting for only 0.1 percent of global M&A transactions, Vietnam has an ample room for more M&A deals to take place in future. However, the country and local enterprises should make efforts to overcome the current obstacles, which include the quality of business, the foreign ownership limit, financial transparency, and value appraisal.
The global law firm Baker McKenzie projects a total volume of M&A transactions at 331 deals for Vietnam in 2018, with 263 domestic and 68 cross-border inbound deals. In the following years, Vietnam could expect slightly more deals, at 338 in 2019, but in 2020, the figure is expected to drop to 204 transactions.
Tuan suggested that opportunities will be more open for local consulting firms if they actively cooperate with domestic and foreign financial institutions to participate in M&A consultancy.
Expecting about the rising trend of M&A market in the country, Nhu Dinh Hoa, BVSC General Director, said his company aims to promote consulting services, targeting a year-on-year 30 percent increase in revenue from the segment in 2018.
