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On November 13, 2024, a talkshow on the theme “Identifying M&A Capital Flows” was organized by Vietnam Investment Review (VIR). This event served as a preliminary program in preparation for the 16th Annual Vietnam M&A Forum – 2024, which will take place on November 27, 2024, at the JW Marriott Saigon Hotel (Ho Chi Minh City) to discuss opportunities and dominant trends in the M&A field.
To prepare for the Forum, the Vietnam Investment Review invited three guests:
- Lawyer Pham Duy Khuong, Managing Partner, ASL LAW;
- Mr. Hoang Xuan Trung, Head of Corporate Clients – Capital Markets Division, Citi Bank in Vietnam;
- Mr. Dinh The Anh, Managing Partner, Head of Corporate Finance Advisory, KPMG Vietnam.
After a quiet period, Vietnam’s M&A market is on a positive recovery trend, with major deals gradually reappearing. The 16th Vietnam M&A Forum is expected to discuss M&A trends in Vietnam in 2024 and set the direction for 2025.
Speakers at the Forum will analyze strategies to optimize deal value, new collaboration models, and ways companies can leverage the M&A wave to grow in an increasingly competitive global landscape. The Vietnam M&A Forum is an annual, prestigious event on M&A and investment connections in Vietnam organized by Vietnam Investment Review under the sponsorship of the Ministry of Planning and Investment.
Content of the Talkshow “Identifying M&A Capital Flows”
The program was hosted by journalist Huy Hao from Vietnam Investment Review.
Foreign Investors’ Perspective on Changes in Vietnam
Following Mr. Trung’s insights, Mr. Hao posed the first question to Lawyer Pham Duy Khuong, Managing Partner at ASL LAW: “Many investors are now interested in policy shifts following the 8th session of the National Assembly. So, from a legal firm’s perspective, what impacts or considerations do policies like the ‘one law amending seven laws’ or ‘one law amending four laws’ have for investors and businesses?”
Lawyer Khuong shared: “Current policy changes are driven by Vietnam’s goals for GDP and economic growth. From a legal firm’s viewpoint, we observe that international investors are increasingly investing in Vietnam, particularly from Japan, Singapore, and China.”
“However, despite the growth in FDI, we still see caution among investors. They often pause to assess whether changes in the investment environment, institutions, policies, and laws in Vietnam will impact their capital flow. The issues of tax and financial transparency and safety are especially important.”
“These recent legal changes have helped resolve some obstacles, allowing foreign investors greater confidence. They also help Vietnamese businesses collaborate more effectively with foreign investors through joint ventures.”
Why Are M&A Deals Increasing While Their Value Declines?
After Mr. The Anh’s remarks on why the number of M&A deals in Vietnam is increasing but the value remains stagnant or declining, Mr. Hao invited Mr. Khuong to share his perspective.
Lawyer Khuong stated: “ASL LAW recently attended an M&A conference in Tokyo, Japan, focused on the M&A landscape in the Asia-Pacific region. I completely agree with Mr. The Anh’s observation on the decline in deal values. This trend is seen not only in ASEAN but across the whole of Asia.”
“The primary reason is that the main organizations impacting M&A are from China and Japan. So, when purchasing power in these regions declines, it affects the entire global market, including Vietnam. There has been a general stagnation among businesses, as if they are waiting for something.”
“In China, for instance, companies have been holding back on larger M&A activities, awaiting the U.S. presidential election results. They have only engaged in smaller M&A transactions to test the market. When the new U.S. President is officially announced, they are expected to fully commit resources to larger M&A transactions, likely increasing the overall number and average deal value. I believe that Vietnam and Mexico will be two potential markets to welcome an upcoming M&A wave, based on past data from the U.S.-China trade tensions.”
Advantages of Domestic and Foreign Investors
Journalist Huy Hao noted that in certain fields, we can clearly see differences between domestic and foreign investors. He invited Mr. Trung and Mr. Khuong to discuss the advantages each type of investor has, particularly in the real estate sector.
After Mr. Trung highlighted the distinct advantages that domestic investors have in real estate transactions and deals compared to foreign investors, Lawyer Khuong commented: “Real estate is a very unique sector in Vietnam. Foreign investors mainly operate in the secondary market, i.e., buying and selling properties after the project has been developed and constructed. They typically do not participate in the initial primary market.”
“In most countries, allowing foreign investors to enter the primary market is challenging. This situation results in an almost exclusive playing field for domestic investors. So, based on ASL LAW’s experience with clients, I lean toward foreign investors having the advantage in secondary real estate M&A.”
“Foreign investors from Japan, South Korea, and China are very eager to enter the Vietnamese market through M&A transactions. This insight is based on our practical experience, as we receive many requests from investors looking to acquire Vietnamese companies to establish a foothold in this promising market.”
Vietnam’s Potential
Near the end of the program, Mr. Hao invited the guests to share their thoughts on the most noteworthy M&A trends in the coming period and to express an expectation for the M&A market.
Mr. Khuong shared: “In my opinion, the hope for future M&A is that Vietnamese enterprises can actively join the global supply chain, especially in high-tech manufacturing and clean energy.”
“Moreover, with the U.S. presidential election results confirmed last week, we can anticipate potential trade tensions. This will be both a challenge and an opportunity for Vietnam to become a rising, irreplaceable star and a crucial link in the global supply chain for high-tech products.”
Concluding the talkshow on “Identifying M&A Capital Flows,” Mr. Hao thanked the guests for participating and sharing their invaluable insights on M&A. He also expressed his gratitude to the audience and invited them to join the Vietnam M&A Forum on November 27 in Ho Chi Minh City.
See the full content of the Talkshow here.
ASL Law is a leading full-service and independent Vietnamese law firm made up of experienced and talented lawyers. ASL Law is ranked as the top tier Law Firm in Vietnam by Legal500, Asia Law, WTR, and Asia Business Law Journal. Based in both Hanoi and Ho Chi Minh City in Vietnam, the firm’s main purpose is to provide the most practical, efficient and lawful advice to its domestic and international clients. If we can be of assistance, please email to [email protected].
ASL LAW is the top tier M&A law firm in Vietnam. If you need any advice, please contact us for further information or collaboration.
