M&A in Vietnam is growing rapidly in both number and size. In 2005 only 18 M & A deals with a total value of US$61 million. In 2006, the number of M&A deals increase to 32 transactions with total value of US$245 million.
M&A deals have continued the steady rise in recent years as an emerging investment channel for companies inside and outside the nation. 2012 is a remarkable year with many M&A deals which are recognized as biggest M&A deals in Vietnam so far, comprising of: Bank of Tokyo bought Vietinbank (US $743 million); French investor bought Oil Field Block 15-2 (US$615 million); Perenco spent $397 million to buy Oil Field Block 15-1 (US$397 million); Sumitomo bought 15 percent of Bao Viet Group (US $340 million); Perenco bought Nam Con Son (US$287.3 million); Thai investor bought Prime Group (US$240 million); Thang Long cement changes hands (US$230 million); British group bought Soco Vietnam (US$95 million)… .
However, until now, Vietnam has no single and comprehensive M&A law. M&A regulations are found in various pieces of legislation, including the Law on Enterprises, Law on Investment, Law on Securities, Law on Competition, laws regulating specialized business sectors and certain commitments made in international treaties.
There are a number of legal issues which an investor, especially a foreign acquirer, should be aware of:
Foreign ownership restriction including limitation on market accession (such as foreign ownership cap of 49% to public companies, foreign ownership limitation to commercial banks, market accession limitation in tourism sector, etc…);
Different licensing procedures applied to different types of stakes (foreign invested companies would differ from domestic ones, public companies would differ from private companies, buying State owned stakes would be differ from private ones…);
Different interpretation and implementation of local licensing authorities to the international treaties such as Commitments of Vietnam on joining World Trade Organization;
Although legal and governance barriers along with macro instability and the lack of market transparency were still the greatest concerns for investors, M&A in Vietnam is expected to be one of the key, effective channels for market entry. The major M&A trends in Vietnam are forecasted, including bank restructuring, acquisition and anti-acquisition, growing Japanese investment in Vietnam via M&A and reform of State-owned enterprises.
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