Lawyer Pham Duy Khuong, Managing Director of ASL LAW Firm participated in the M&A Forum 2022 as a speaker in the Session 1 of the “M&A opportunities in a volatile market” of the Vietnam M&A Forum 2022. Prestigious newspapers in Vietnam such as VnExpress, VIR – Vietnam Investment Review Newspaper (the organizer of the Forum), Government Portal, Cafef, etc. all reported on the event. In the following article, ASL LAW will quote news reports about ASL LAW Lawyer’s stance at the event.
Vietnam Investment Review Newspaper, the organizer of the Vietnam M&A Forum 2022 under the auspices of the Ministry of Planning and Investment, reported on Lawyer Pham Duy Khuong’s perspective as follows:
“The source of money for M&A in Vietnam mainly comes from Korea, Japan and Singapore.
That is shared by Mr. Pham Duy Khuong, Managing Director of ASL LAW Firm at the Vietnam M&A Forum 2022 organized by the Vietnam Investment Review Newspaper.
According to Mr. Pham Duy Khuong, about the M&A situation, most of the speakers shared about the decrease in M&A sources in the last 6 months of 2022 and the unpredictability in 2023. However, Vietnam is still very attractive to some Japanese, Korean and Singaporean investors.
According to the experience (of lawyer Pham Duy Khuong), the money of Singapore investment funds can be (originated) from China, then (that money) from Singapore will be poured into other countries in the region.
Currently, Vietnam still attracts capital from Japan, Korea, and Singapore. While the source of money from the US and Europe is not too large.
Article on Vietnam Investment Review Newspaper – VIR
There are more sellers than buyers
Mr. Pham Duy Khuong said that potential sectors in 2023 still focus on food, agriculture, information technology and finally the real estate industry when the difficulties are over.
During this difficult period, the parties must focus on the cost and time of the legal due diligence process because legal due diligence in the current context takes a lot of time.
In addition, it is necessary to add contracts related to additional force majeure event clauses to protect the buyer, there are many sellers now, (leading to) the buyers having many options, the seller must find opportunities to approach the buyer, thereby increasing the opportunity to attract capital.”
VOV Vietnam newspaper reported:
Mr. Pham Duy Khuong – Managing Director of ASL LAW Firm said: “In order to be more attractive to foreign investors, we should have stricter or more open regulations, tighter but more open on issues such as capital transferrable and profits of foreign investors. Related to the banking system to help foreign investors more conveniently manage payment accounts. If the payment system problem can be solved, the banking system will promote investment attraction and competition in the ASEAN region.
(According to the article on VOV Vietnam)
Excerpt from Securities Newspaper (Securities Investment – Special page of Vietnam Investment Review Newspaper):
Mr. Seck Yee Chung asked a question at Session 1 within the framework of the M&A Forum 2022: “A question about the big picture, global trends and the Asian and Vietnamese economies. Looking at Korea, Japan and Thailand are active in this field, but there are unpredictable fluctuations. Where do you see the investors coming from, or does the money just keep flowing into Singapore – which has been the transit point for so long?”
Mr. Pham Duy Khuong, Managing Director of ASL LAW Firm, said: “Almost everyone sees a decrease in Vietnam’s M&A market in the last 6 months of 2022, difficult to predict in 2023. If looking at how investment flows into Vietnam will be affected, and from which country, it is difficult to determine which is the main source of M&A. According to the nationality of organizations investing in Vietnam, Vietnam is attractive and suitable for investors, with regards to Japan, Korea, and especially Singapore (difficult to classify where the cash flow comes from, very many sources from China to Singapore and then disbursed in many other countries). The US and EU are still not too large of capital flows to Vietnam’s M&A market.”
When discussed factors to attract investment in the coming time, Mr. Pham Duy Khuong, Managing Director of ASL LAW Firm replied at the forum: “To speak specifically about Vietnam’s bright spot in attracting M&A capital is difficult, but there is a trend that can be seen, that is, many Indian companies are still looking for IT personnel from Vietnam.
Vietnam has a potential market of 100 million people, which is an attractive point for investors. To attract more foreign capital, it is necessary to have both stricter and more open regulations, which are related to the transfer of profits and capital of investors abroad. Relating to the banking system helps investors more convenient in account management and payment when necessary.”
VnExpress newspaper quotes the debate of the Vietnam M&A Forum 2022 as follows:
“A more cautious approach to investment after the pandemic, plus existing risks such as inflation, geopolitical tensions, and the gap between buyer and seller expectations has affected risk appetite of foreign investors, leading to a slowdown in cross-border M&A activities,” said Warrick Cleine, President and CEO of KPMG Vietnam, at the Mergers and Acquisitions (M&A) Forum hosted by the Vietnam Investment Review Newspaper held on the afternoon of November 23rd.
Agreeing on the above factors, but Mr. Pham Duy Khuong – Managing Director of ASL LAW Firm – said that the main reason for the slowdown of M&A is the legal due diligence process that arises many features, resulting in more time needed. This also makes the time needed for negotiation of deals 30-35% higher than before.
According to Mr. Khuong, the legal due diligence process normally only encapsulates a few issues, but now there are additional factors of inflation and recession risk, so the consulting unit needs a lot of effort and time to review the terms and conditions of termination of contracts. In case the seller is an enterprise that issues bonds, the buyer also pays attention and evaluates it more carefully.
(According to the article on VnExpress newspaper)
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.