Thai Billionaires and M&A Activities in Vietnam

The billion-dollar acquisitions of Thai billionaires have brought Thailand to become a formidable force in M&A activities in Vietnam and Asia.

Big C Vietnam has fallen into the hands of billionaire Tos Chirathivat – the boss of Central Group (Thailand) from Casino Group (France) for 1.05 billion USD. In 2015, this group also spent about 100 million USD to acquire Nguyen Kim – the leading retailer in the electronics market. Recently, the Group also spent 10 million USD to acquire the business segments in Thailand and Vietnam of Zalora (belongs to Global Fashion Group of Rocket Internet Corporation).

Previously, billionaire Charoen Sirivadhanabhakdi – owner of TCC Holdings (Thailand) spent 655 million Euros to buy 19 centers and relating real estates of Metro Cash & Cary Vietnam. Also, Berli Jucker (BJC), a subsidiary of TCC Holdings also acquired Family Mart Vietnam. Especially, along with the acquisition of Metro Cash & Carry Vietnam, billionaire Charoen Sirivadhanabhakdi also through the Singapore Beverage Group – Fraser & Neave (F&N) became the 2nd largest shareholder in Vinamilk with 11.04% share. Currently, Thaibev which also belongs to this billionaire is racing to buy 40% share in Saigon beer (Sabeco), with a value of 1 billion USD.

In fact, the trend that Thai businesses acquired businesses outside their national borders is not new. In 2012, Siam Cement Group (SCG) of Thailand signed an agreement to buy 85% share in Prime Group JSC (Vietnam) at the price of 7.2 billion Baht (nearly 5,000 billion VND). This is also the biggest M&A deal in the field of building materials in Vietnam so far.

In the plastic industry, currently, SCG has invested in more than 20 Vietnam plastic enterprises. Particularly, the most significant investment is to buy 80% share in Tin Thanh Plastic Company, a top enterprise in the field of plastic packaging of Vietnam. SCG also holds large shares in 4 companies specialized in manufacturing plastic household – packaging in Vietnam, which are Vietnam – Thai Plastchem Joint Venture, TPC Vina Plastic and Chemical, Minh Thai and Chemtech Plastic Materials.

Currently, SCG is also the 2nd largest shareholder in Tien Phong Plastics and Binh Minh Plastics, just after State Capital Investment Corporation (SCIC). Moreover, SCIC planned to divest from this two plastics companies. This will create opportunities for Nawaplastic Industries to increase its shares in Tien Phong Plastics and Binh Minh Plastics. SCG continues to seek opportunities to invest in Vietnam’s plastic industry.

Most recently, the Ton Poh Thailand Fund has spent 130 billion VND to buy 5.9 million shares of Hoang Huy Investment – Service Company, equivalent to 5.32% of the charter capital of the company. In addition to Hoang Huy, Ton Poh Thailand Fund also owns nearly 6% share of Cotec Construction Company.

An open economic space will create significant opportunities for investment flows. The formation of the ASEAN Economic Community (AEC) and the Trans-Pacific Partnership Agreement (TPP), which expected to take effect from 2018, is the impetus for investment flows into the country in this area. The race has just begun for the countries, investors and Thailand businesses seem to hold this game.

The billion-dollar acquisitions of ambitious billionaires brought Thailand to become a powerful force in M&A activity in Asia. According to experts, the deal with the presence of Thai companies in the M&A market in Asia has increased rapidly, just behind China, Korea and India.

In particular, the market of more than 600 million people of AEC is considered as a more stable market than most emerging markets in the world. The growth opportunities for businesses here will be very attractive, regardless of Thailand, Vietnam enterprises or from other economies.

To sum up, according to economic analysts, the increase of M&A activities will be the obvious result due to the free trade between the countries in goods, services and human resources.

Readmore: http://www.antconsult.vn/news/thai-billionaires-and-ma-activities-in-vietnam.html

Read More

M&A Vietnam – “Hot” Investment Channel

 

In recent years, foreign investors spent approximately 3 billion USD to buy shares in more than 3,000 enterprises in Vietnam, in which most of them purchased over 50% of the shares. It indicates that investment trends through the model of merger and acquisition (M&A) are booming strongly in the market.

According to the report from the Foreign Investment Department under the Ministry of Planning and Investment, from July 1st 2015 to July 1st 2016, there were 3,141 companies in Vietnam are acquired by foreign investors in the form of buying shares. The total value of those deals is 2,948 billion USD. This is the first time the Foreign Investment Department showed the statistics on foreign investment flows into Vietnam through M&A activities. It shows that the trend of investment into Vietnam through M&A is increasing greatly.

As reported by the IMAA, a foreign research institute on M&A, the total value of M&A in Vietnam in 2015 reached 4.3 billion USD, 40% higher than in 2014 and surpassing the record level of 4.2 billion USD in 2012. It is expected that the value of M&A deals in Vietnam in 2016 is likely to break the record of 2015 and reached 6 billion USD.

Many analysts are predicting that the food, logistics, retail and real estate industries will still be targeted by foreign investors. The main reason is that the potential of Vietnamese consumers is growing due to young population and growing economy.

Among more than 3,000 M&A deals that are statistically by Foreign Investment Department, there were 1,894 deals valued at 1.8 billion USD that are invested by foreign investors to hold dominant share of over 50% . It means more than half of M&A deals in the past year are made with long-term investment objectives.

There has been more active involvement of the Private Equity fund (PE). Previously, if the PE funds often take part in the purchase of shares which is not dominant, but now, the PE fund is ready to invest at a higher percentage to increase profit and reduce competition. In addition, the increase in ownership percentage will also help to increase the PE funds’ intervention in business activities of enterprises to create surplus value.

When the inflow of foreign investment into Vietnam through M&A increases, it will create opportunities for domestic enterprises to mobilize capital, improve enterprise management skills and competitiveness. One of the examples is the case that Vietnam Airlines sold 8.8% of shares to ANA Holding, the largest airline corporation in Japan.

In fact, many other businesses also consider M&A as an effective channel for capital mobilization. Therefore, after the Vietnam Government allowed to increase the percentage of capital held by foreign investors at the company listing on the stock market to 100%, many companies have decided to open “room” to welcome this new capital flows. Many examples are Hoang Quan Real Estate Company, Thu Duc Housing, An Phat Plastic and TNG Garment. Even Vinamilk, one of the most successful dairy enterprises in Vietnam, also have to think about loosening “room” to 100% to attract foreign investment through M&A activities.

Readmore: http://www.antconsult.vn/news/ma-vietnam-hot-investment-channel.html

Read More

M&A Activities in Vietnam in Recent Years

 

Vietnam’s population is more than 90 million people so that foreign investors are looking at Vietnam as a fertile ground to expand their market by M&A deals.

Accordingly, along with the process of restructuring the economy and international integration of Vietnam, in recent years, merger and acquisition (M&A) activities have been fairly active, in which many major transactions involving Thai enterprises.

In 2009, the total value of M&A transactions in Vietnam reached 1 billion USD then in 2015, the number is 5 billion USD. Particularly for the first 6 months of 2016, the value of M&A in Vietnam has exceeded 3 billion USD, in which it took place in such sectors as retail, commodities and real estate…

Thailand, Japan and Singapore are still the major buyers in Vietnam market. While Japan invests in companies in aviation, petroleum and pharmaceutical sectors, Singapore emerges with commercial real estate projects. Lastly, Thailand continues to focus on the retail segment with the goal of expanding the market.

Head of M&A transactions last year is the retail sector and consumer goods, accounting for 38.46% of the total value. In particular, the scale of 2 M&A deals from Thailand accounted for 24.8% of the total value of 2015 and the first half of 2016. This shows the trend that retail businesses at home and abroad continue to explore the market with more than 90 million people of Vietnam. Recently, Thailand’s major corporations continuously acquired large supermarket chains such as Metro, Big C… Singha has also become a strategic partner of Masan with investment value of 1.1 billion USD.

According to experts, there is a great competition in the business sector of Thailand and Japan when investing in Vietnam because Vietnam market has now fully matured and become more attractive. On the other hand, the market of Thailand and Japan has begun to saturate.

Especially, there is a wave of M&A of Thai investors in Vietnam in order to expand the market for the “Made in Thailand” products. While Thailand’s population is about 50 million, the size of Vietnam’s population is almost double – over 90 million people.

With many innovations in policy such as the Investment Law and the Enterprise Law, the process of international integration will create opportunities and new playing field for the M&A transactions to boom.

Readmore: http://www.antconsult.vn/news/ma-activities-in-vietnam-in-recent-years.html

Read More