The market is like a "compressed spring"
After a gloomy 2023, the M&A (mergers and acquisitions) market in 2024 is expected to be more vibrant, but market developments this year have not been really exciting.
Experts assess that the Vietnamese M&A market is like a "compressed spring", waiting for a favorable opportunity to burst out.
Mr. Nguyen Cong Ai - Deputy General Director of KPMG Vietnam - assessed that in 2023, the M&A market was very low, and in 2024, the market was not as good as expected.
“In 2024, there is a trend that deals will not be foreign investors buying domestic companies, but domestic companies buying each other. Due to more protectionist policies in countries, money is hesitant to flow abroad when interest rates are high.”
KPMG representative said that in the first 9 months of 2024, Vietnam recorded a significant improvement in M&A transaction value, with an increase of 45.9%. This transaction value growth was mainly driven by the low base in 2023, and at the same time, a number of large transactions from domestic investors.
It shows that domestic enterprises may be adjusting their business strategies and optimizing to focus more on their key areas in the context of a challenging business environment.
Since the beginning of the year, the market has recorded many notable deals. In particular, the industrial production sector has had outstanding deals such as: VinFast Auto acquired VinES Energy Solutions; Mitsui announced to invest about 560 million USD in the Lot B - O Mon power project chain in Vietnam.
In the clean energy sector, a subsidiary of Sembcorp (Singapore) has acquired the majority of capital contributions in 3 subsidiaries of the Gelex Group system; Levanta Renewables (Singapore) acquired a 28.7MWp rooftop solar power project from Tien Nga...
In the consumer goods sector, along with the Masan Group deal, there were other major deals, such as KIDO completing an agreement to increase its ownership ratio at Hung Vuong Group to 75.39%. KIDO also successfully transferred 51% of its shares at its member company Kido Foods to Nutifood; Greenbee bought 5% of Bach Hoa Xanh shares worth more than VND1,700 billion...
New trend of foreign investors
Given the current market developments, experts predict that in 2025, M&A activities will have more positive changes, previously postponed transactions are likely to become active again, even exploding.
Mr. Nguyen Cong Ai predicted: “In 2024, the M&A market will continue to accumulate energy, waiting for an explosion in 2025. Investors’ tastes in the Vietnamese M&A market are quite diverse. In addition to the main dishes such as real estate, consumer goods, industry, etc., new and attractive dishes have appeared.”
In particular, foreign investors are interested in energy sources and green energy use, ESG (environmental, social and governance) standards. Vietnam is currently promoting these factors.
Regarding the digitalization of the economy, many foreign enterprises are establishing data processing centers in Vietnam to take advantage of skilled and reasonably priced labor. Industries related to artificial intelligence (AI) and cloud computing are also of great interest. “In economic sectors, the investment prospects in renewable energy, healthcare, and education are quite bright,” Mr. Ai commented.
In the real estate sector, Mr. David Jackson - General Director of Avison Young Vietnam - predicted that the main segments in M&A will continue to be industry and logistics, commercial housing, offices and complex projects.
“The new laws are expected to help shorten legal procedures, protect the interests of all parties, thereby promising a more stable and transparent investment environment. Therefore, international investors still maintain an optimistic outlook on the Vietnamese economy and real estate market for at least the next 5-10 years and will continue to pursue a strategy of expanding and diversifying their investment portfolios here,” said Mr. David Jackson.
