South Korean and Japanese investors are exploring investment options in local companies operating in logistics, infrastructure and pharmaceuticals, according to speakers at the Vietnam M&A Forum 2018.
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Recently, South Korean pharmaceutical companies have studied their counterparts in Vietnam. As part of the investment process, Korean investors look to transfer technology, capabilities in corporate governance and marketing to local companies, Park informed.
Although companies from both sides seem to be on the same wavelength, there should be more cooperation and support from each other. At present, Korean investors are forming a strategic coalition with their Vietnamese partners, Park added.
South Korean investors have been investing heavily in a number of countries, including Vietnam, Myanmar, Laos and Cambodia, but Vietnam remains their priority, according to Park.
Evidently, South Korea's foreign direct investment (FDI) to Vietnam accounts for 30% of its total FDI worldwide. However, only 5% of the capital flows into M&A activities, which is less than expected.
Nevertheless, the number of transactions is growing. Total capital injected through M&A deals from South Korea to Vietnam in 2017 was US$300 million, while the figure reached US$200 million in the first six months of 2018.
For his part, Masataka Sam Yoshida, senior managing director of Japan-based Recof Corporation, said that Japanese investors are keen on Vietnam's infrastructure sector, which could increase the total FDI from Japan to Vietnam to US$9 - 10 billion this year.
For the M&A market, the number of transactions is increasing as Japanese companies are very strong in these activities.
In this market, Japanese investors are new arrivals compared to those from South Korea or Singapore. Moreover, Japanese investors are very cautious and conservative in their investment, which makes decision making longer, Yoshida warned.
According to Yoshida, Japanese companies also show interest in Vietnam's energy sector and agriculture.
"Japanese multinational companies are changing their business strategy. As their founders are mostly at the age of 60 or 70, they are now in search of new successors. The new generations are more active and have a different mindset. They are willing to explore new fields," Yoshida said.
