Positive signs emerging for the M&A market

A speaker makes a presentation on the Vietnamese scene at the M&A Forum in HCM City. — Vietnam News

HO CHI MINH CITY: The emergence of domestic buyers in the mergers and acquisitions (M&A) market is a positive sign amid the global slump in the M&A market, a forum titled “Thriving Together” heard here on Tuesday.

Organised by Investment Review magazine and endorsed by the Ministry of Planning and Investment, the 15th M&A Forum heard that Vietnam and the global market are now cooling down after a period of strong development.

A report tabled by KPMG Vietnam said in the first 10 months of this year there had been 265 deals valued at over US$4.4bil, a 23% decrease from the same period last year.

The average deal value was US$54.5mil, indicating a shift towards strategic investments requiring greater financial capabilities.

Some 80% of the value was in the healthcare, finance and property sectors.

Meanwhile, there were only three initial public offerings, which raised a paltry US$7mil.

It might take until the first half of 2024 for Vietnam’s M&A market to reverse the decline, forum delegates said.

They attributed the global downturn to inflation and the Russia-Ukraine and Israel-Palestine conflicts.

Deputy Minister of Planning and Investment Tran Huy Dong said: “The global economy, including Vietnam’s trade partners and investors, continues to experience low growth. Global trade recovery is slow, posing concerns about supply instability, especially in strategic goods like energy, food and semiconductors.

“The risks of public debt and risk on financial and real estate markets are rising in some countries. Increased competition in attracting investment, particularly with the introduction of a global minimum tax in some countries in 2024, is expected to redirect foreign investment flows, including through the M&A channel.

“A positive sign is that domestic enterprises are also emerging as buyers, ready to take over the assets of fellow local and foreign enterprises to enhance their own eco-systems.”

This challenging period is also an appropriate time for many Vietnamese enterprises to reconsider their strategies, seek new growth models and focus on restructuring their long-term business operations, he said.

“Many companies have developed comprehensive strategies and plans to seek partners for joint development, and M&A is a priority route.”

Opportunities are increasing for all parties to find common ground and strive for prosperity with support from the government’s robust economic recovery policies, he said. — Viet Nam News/ANN

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