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Mergers and acquisitions (M&A) are becoming a strategic trend in Vietnam, especially as international capital continues to flow into the market. However, for any M&A transaction to succeed, legal considerations play a vital role, particularly during the stages of due diligence, negotiation, and contract execution.
Legal due diligence – the foundation of any M&A transaction
Before proceeding with any M&A deal, the buyer typically conducts legal due diligence in Vietnam (Read: Note on the necessity of legal due diligence in M&A transactions in Vietnam) to assess risks and determine the true value of the target company. Key areas of review include legal status, ownership of assets, labor obligations, tax compliance, and any ongoing or potential disputes.
A thorough due diligence process helps investors gain a clear understanding of the target company’s legal standing, allowing for more accurate negotiations and minimizing legal risks after the transaction closes. This step is usually carried out by law firms in coordination with financial, accounting, and corporate governance teams.
Negotiation and execution of the transfer agreement
Based on the due diligence results, the parties move on to negotiating the share or asset transfer agreement. The contract should clearly define key provisions such as transaction value, payment methods, transfer timeline, representations and warranties, disbursement conditions, and dispute resolution mechanisms.
Contract drafting must comply with Vietnamese law, especially in sectors subject to investment conditions or foreign ownership limits. After signing, if the M&A transaction changes the ownership structure of the company, the parties must register the change with the Business Registration Office and/or notify the foreign investment authority, if applicable.
M&A in Vietnam is not merely a commercial deal but a complex legal process that requires careful preparation and specialized advice. To ensure a smooth and legally compliant transaction, enterprises should engage experienced M&A lawyers and consultants throughout the process.
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.
