Statement of the problem
Since the Vietnamese government began opening and integrating the economy into the global market, the country has experienced rapid economic growth, with positive development signals emerging despite a brief setback during the Asian financial crisis from the late 1990s to 2007 This period coincided with a global surge in mergers and acquisitions (M&A), which expanded significantly in the 2000s across various scales and types, affecting not only developed nations but also emerging markets like Vietnam.
Since joining the World Trade Organization (WTO), Vietnam's economy has flourished, attracting foreign investors and significantly benefiting from Foreign Direct Investment (FDI), which contributes 18%-20% of the country's GDP The two primary forms of FDI in Vietnam are Greenfield Investment (GI) and Mergers and Acquisitions (M&A), both primarily executed by Multinational Corporations (MNCs) and Transnational Corporations (TNCs) Initially, GI was crucial for restructuring Vietnam's economy during its early integration into the global market However, M&A activities gained traction in recent years, particularly following global economic downturns, with M&A values rising from one billion dollars in 2009 to five billion dollars in 2011.
Foreign Direct Investment (FDI) and cross-border mergers and acquisitions (M&A) have significantly contributed to Vietnam's economic growth by introducing modern technologies, financial resources, skilled labor, and effective management practices, particularly during the current global economic crisis However, effectively capitalizing on the opportunities presented by cross-border M&As remains a complex challenge for the nation.
Vietnam must establish appropriate conditions and a timely vision, along with effective policies, to anticipate trends in foreign-related mergers and acquisitions (M&A) By leveraging the advantages of M&A, the country can navigate potential challenges and mitigate unforeseen consequences in an unstable economic environment.
Research question(s) or Objectives
This research provides an overview of foreign investors' M&A activities in Vietnam during the global economic recession, focusing on how these enterprises navigate the current economic landscape and their motivations for these transactions It also examines the responses of the government and domestic enterprises to the surge in M&A activities to assess their impact on the country's economy Furthermore, the study offers recommended measures to enhance foreign investment through M&A while ensuring fairness and efficiency Ultimately, this research aims to serve as a valuable resource for scholars and business professionals interested in M&A transactions in Vietnam.
In brief, these objectives would be achieved by addressing four following research questions:
1 What is the trend of M&A activities of foreign investors in Vietnam at the time of global economic crisis? And how do these M&As impact on the economy of Vietnam?
2 What are the internal and external factors that affect this trend?
3 How do the government and the domestic enterprises react to this massive wave of M&A activities?
4 What are the recommendations for Vietnamese government and enterprises to take advantage of the M&A activities of the foreign investors?
Significance of the research
The completed thesis will offer a valuable overview of current foreign-related M&A activities in Vietnam, enabling enterprises to analyze inbound deal opportunities Additionally, it serves as a reliable reference for students, educators, and researchers interested in cross-border M&A transactions.
Scope of the study
The scope of this study has been made clearly in the title “ Analysis of the M&A activities of the foreign investors in Vietnam in 2008 -2012”
Firstly, the study is aimed at defining what the mergers and acquisitions is and investigating their features and the factors that obviously affect this type of investment in Vietnam
Secondly, there are certain time and space bounds in this thesis The author just viewed the foreign-related M&A deals in Vietnam and in the period of 2008-2012 only
This paper has finally figured out the recommendations for developing the economy in Vietnam, closely basing on the restricted context and purposes.
Organi zation of the study
The paper is structured as following three chapters:
Chapter 1 – Literature review – provides the profound definition of key concepts, theories, and discussions of related studies
Chapter 2 – Methodology – introduces selection of subjects, data collection instruments, data collection procedures, data analysis methods and data analysis procedures
Chapter 3- Findings and Results- presents the analysis and gives the own findings to answer the research questions and suggests some recommendation for the situation
Key concepts
Merger and Acquisitions (M&A)
The Organisation for Economic Co-operation and Development (OECD) defines M&A as an abbreviation for "Mergers and Acquisitions," a term that refers to the process of purchasing, acquiring, or consolidating assets and stakeholders between two or more companies.
The term "M&A" is commonly recognized globally, yet it lacks a universal legal definition, as each country has its own legal framework and interpretation of mergers and acquisitions.
In the United States, mergers refer to the process where one company fully acquires another, resulting in the acquired company losing its identity and becoming part of the larger entity This acquisition leads to the transferring of rights, legal interests, and responsibilities to the acquiring company, effectively relegating the acquired firm to a subordinate role In contrast, consolidation involves both companies relinquishing their individual characteristics to form an entirely new organization.
The European Commission defines mergers and acquisitions (M&A) under the EC Merger Regulation No 139/2004, established on January 20, 2004 According to this regulation, a merger occurs when two separate entities or parts of two legal entities come together, or when one entity takes over another.
The EC Merger Regulation outlines the processes for direct or indirect management through the acquisition of market shares or assets from another company, as well as the establishment of new joint ventures It also provides a formula for calculating revenue, which is essential for the implementation of mergers and acquisitions.
Despite variations in the legal systems of European Community (EC) member nations, the EC Merger Regulation is consistently enforced and holds greater influence than individual national laws.
+ Article 17 in the Competition Law: A company or a number of companies transfer all its/their assets, rights, liabilities, and legal interests to another company and ended the former existence
According to the M&A Asian Tax Guide (2012, p.261) by PricecooperWater, Vietnamese regulations define a merger as the process where one or more companies of the same type consolidate into another company This involves the transfer of all assets, rights, obligations, and interests to the newly merged entity, while simultaneously terminating the existence of the merging companies.
+ Article 17 in the Competition Law: “ One company purchases the whole or a part of another enough to take control, exclusively manage all or one business activity in the bought company”
Acquisitions in Vietnam can be organized as either share or asset deals, according to PricewaterhouseCoopers in the M&A Asian Tax Guide (2012, p.259) For asset deals, foreign buyers typically need to create a new subsidiary within Vietnam.
The definitions of M&A in the different legal papers do not go well with each others Specifically, according to the Enterprise Laws 2005, the companies
7 that carry out the M&A activities must be in the same type of business; however, the Competition Laws 2004 did not mention this phrase.
Motivations for M&A
Mergers and acquisitions (M&A) enable businesses to reduce operational costs by streamlining customer acquisition, expanding market reach, and enhancing brand development.
- Vertical expansion: the company can control the whole or a part of supplying chain so as to gain benefits of products’ input and output
M&A activities enhance resource utilization and sharing, allowing companies to leverage shared experiences, research outcomes, and established distribution systems Additionally, conducting thorough business evaluations opens up new opportunities and facilitates strategic shifts in investment direction.
Economic scale is achieved when a company engages in mergers and acquisitions (M&A) with its market rivals Through M&A activities, the company not only eliminates competition but also strengthens its market position This enables the company to exert price control, potentially leading to monopolistic practices that influence product pricing.
Cross-selling allows companies to leverage each other's services to enhance customer offerings, ultimately boosting revenue and strengthening customer relationships.
-Taxes: A company which is developing can buy out a loss one to enjoy the tax deduction
The sellers have the same motivations as the buyers Moreover, the other motivations in the M&A market are that: (i) coping with the competitive market,
(ii) being attracted by the offers of the buyers, (iii) looking for the strategic partners and so on
The pursuit of strategic partnerships highlights the proactive nature of sellers, serving as a primary motivation for Vietnamese enterprises to safeguard themselves against the challenges posed by current integration and free trade trends.
Types of M&A deals
A horizontal merger
A horizontal merger takes place when two competing companies within the same industry, such as those in the defense sector, unite This consolidation can enhance the market power of the newly formed entity, potentially raising concerns among antitrust regulators.
A vertical merger
A complementary merger occurs when two companies with interconnected operations join forces, such as a pharmaceutical firm partnering with a distributor of pharmaceutical products This strategic alliance enhances their buyer-seller relationship and streamlines their business activities.
A conglomerate merger
A merger involving companies from different industries, such as a tobacco company merging with a food company, exemplifies a type of transaction where there is no existing relationship between the two entities.
Legal framework for M&A in Vietnam
The legal regulations for M&A in Vietnam are gradually accomplished Many regulations have been adopted to create a favourable environment for the
9 international investment The transparency would be strengthened and open a gate for enterprises to approach the modern technologies
- The Law on Enterprises and the Law on Investments in 2005: Greatly clarified and modernized the regulatory framework
The Law on Securities No 70/2006/QH11, amended by Law No 62/2010/QH12, along with its implementing regulations, governs share acquisitions of public companies in Vietnam Specifically, Circular 194/2009/TTBTC outlines the regulations for public tender offers.
- Decree No 122/2011/ND-CP passed by the government dated 27 December 2011 providing a number of amendments to the prevailing Decree No 124/2008/NDCP dated 11 December 2008 on corporate income tax
- Decree 121/2011/ND-CP passed by the government dated 27 December
2011 providing amendment of and supplement to Decree No 123/ND-CP dated 8 December2008 on Value Added Tax (VAT)
- Decree 51/2010/ND-CP passed by government dated 14 May 2010 on invoices
- Circular 28/2011/TT-BTC passed by the Ministry of Financial dated 28 February 2011 on tax administration
- Circular No 186/2010/TT-BTC passed by the Ministry of Finance dated
18 November 2010 providing guidance for profit repatriation by foreign investors.
Related researches
Researches of the M&A theory
Numerous studies have explored M&A activities in Vietnam, providing valuable insights into this dynamic sector Notable research includes Phung, N.V.N (2012), whose Master's thesis titled “Hoan thien phap luat ve sat nhap va mua lai doanh nghiep (M&A) phu hop voi cac cam ket quoc te cua Viet Nam” examines the legal framework for mergers and acquisitions in alignment with Vietnam's international commitments.
Nguyen, T.N.D., (2012) “Mua ban sat nhap – Con duong de cac doanh nghiep Viet Nam phat trien”, No.08, Dong A University, 3) Bertrand, A., (November,
2004) “Mergers and Acquisitions (M&As) Greenfield investments and Extension of capacity”, DITEG
Recent studies have clarified the definition of mergers and acquisitions (M&A) by exploring the distinctions between them, the various types of M&A, and the underlying motivations for these activities Bertrand (2004) offered a comprehensive overview of M&A, enhancing readers' understanding of its true nature Phung (2012) analyzed the legal framework governing M&A in Vietnam, while Nguyen (2012) highlighted a promising future for Vietnamese enterprises regarding M&A opportunities.
Despite previous studies, certain issues regarding cross-border mergers and acquisitions (M&A) in Vietnam remain unresolved While an overview of both inbound and outbound deals was provided, a comprehensive analysis of cross-border M&A statistics was lacking Given the promising future of cross-border M&A in Vietnam's market, this thesis aims to further clarify and analyze these critical issues.
Researches of Vietnam’s policies for M&A activites in FDI
Research on Vietnam's legal frameworks and policies includes notable work by Phung, N.V N (2012), which focuses on enhancing the legal regulations surrounding mergers and acquisitions (M&A) to align with Vietnam's international commitments.
In the 2012 Master Thesis by Nguyen T.N.D., titled "Mua ban sat nhap – Con duong de cac doanh nghiep Viet Nam phat trien," the author explores the pathways for the development of Vietnamese enterprises The research is contextualized within the framework of significant legal regulations, including the Law on Enterprises and the Law on Investments established in 2005, as well as the Law on Securities.
2006 5) SEIKO IDEAS (May 28, 2012), volume 3, “Vietnam news collection” 6) Linh San (May 2012) “Target Soughts”
By seeing such researches and legal papers, there are some things remarkable to mention Although some obstacles still remain, Vietnam has set a
The legal framework for mergers and acquisitions (M&A) is highly favorable, particularly for international transactions Laws are continuously reviewed and updated to reflect recent trends in M&A, facilitating foreign direct investment (FDI) and creating opportunities for enterprises looking to expand in the country.
Despite the drawbacks of M&A activities in Vietnam noted by Nguyen (2012), there were no clear solutions or policies proposed by Vietnamese enterprises or the government SEIKO IDEAS (2012) suggested that to maximize benefits from inbound deals, the Vietnamese government and both domestic and international investors should focus on renewing legislation and enhancing financial operations Although policies have improved, their predictability remains an issue Linh San (2012) emphasized that economic stability is crucial for attracting foreign investors, while inadequate infrastructure is a significant concern Additionally, Mr Stephen Gaskin, Deputy General Director of PwC Vietnam (2012), identified the need for adequate human resources, IT, and operational capabilities as key challenges for international investors.
This research paper synthesizes insights from various studies and reports, offering its own analysis and recommendations to enhance Vietnam's economic performance through foreign investor M&A activities A comprehensive analysis will be conducted within the research.
Researches of the M&A situation in the world and in Vietnam
M&A activities globally and in Vietnam have been explored in various studies, highlighting key insights Notably, Nguyen, V.Q (2012) provides a comprehensive guide on M&A strategies in Vietnam, while Baodientu reveals significant deals that shape the market landscape.
Vn 2013 3) KPMG (2011) “Taxation of Cross-border Mergers and Acquisitions”,
4) United Nations (2012) “World Economic Situation and Prospects 2012” 5)
Zachary, R.M., Matthew,C., Cathy, C., (Sep 27, 2012 ) “M&A Slumps to Lowest Level Since Financial Crisis’s Nadir”,
The recent global economic crisis has significantly impacted national economies, influencing business behaviors and M&A activities According to the United Nations (2012), the global economic outlook remains bleak, affecting both developed and emerging markets This downturn has led to a notable decline in M&A volume and deal numbers, reaching unprecedented lows (Zachary, R.M; Matthew, C.; Cathy, C 2012) Despite this sluggishness, cross-border M&A deals in the Asia-Pacific region are on the rise, driven by advantages such as long-term capital and affordable global assets, with Vietnam attracting considerable international investment.
M&A activities vary significantly across nations due to unique geography, culture, and business customs In Vietnam, numerous studies have explored current M&A trends, providing both overviews and tailored suggestions for improvement Some research has specifically focused on foreign-related M&A activities, aiming for precise analysis These insights will lead to better recommendations for enhancing Vietnam's economic development.
Concerned with the recent M&A situation in Vietnam, Nguyen, Q.V (2012) noticed that although Vietnam’s economy was suffering the global recession, the
From 2008 to 2011, Vietnam experienced a steady increase in the number and value of mergers and acquisitions (M&A), despite the global recession, highlighting strong foreign participation However, the unique characteristics of the Vietnamese market and insufficient legal regulations posed significant challenges for foreign investors.
Mr Vinh noted that foreign corporations predominantly seized the opportunities in Vietnam's burgeoning market, which boasts a large and growing population Local companies faced devaluation due to factors such as the economic crisis, which placed many firms in distress, and the influx of foreign indirect investment in 2006 and 2007 that made shares more accessible Additionally, state-owned enterprises, managed by the government, contributed to market saturation Despite an increase in cross-border deals, the number of successful transactions remained low, as investors often overlooked the domestic market, leading to inaccurate company valuations Legal challenges and unfavorable conditions for targeted firms further hindered deal success and caused delays.
A KPMG report from 2011 highlighted the challenges faced by corporations in Vietnam regarding mergers and acquisitions (M&A), noting the absence of legal guidance to aid in the preparation and execution of M&A processes Additionally, the report pointed out issues with transparency, making it difficult for international firms to assess the existing legislation.
Despite facing challenges, developing economies remain appealing to international firms, with inbound mergers and acquisitions (M&A) leading the activity Japan has been the foremost investor in Vietnam through M&A, consistently topping both deal volume and value Following Japan, Korea and Thailand rank second and third in investment activity, respectively.
In the 2013 report "Reveal Some Huge Deals," it was noted that the total value of deals reached approximately $2 billion, despite a decrease in the number of deals in 2012 compared to 2011, highlighting a significant increase in value Early in 2013, the M&A market anticipates a landmark acquisition by Mitsubishi Tokyo UFJ, which plans to purchase a 20% stake in Vietinbank by the first quarter The report also emphasizes that investors are keenly interested in the Food and Beverage, Consumption, and Infrastructure sectors, despite their vulnerability to inflationary pressures.
Foreign Direct Investment (FDI) inflows to Vietnam are expected to increase significantly by 2020, alongside a rise in foreign-related mergers and acquisitions (M&A) As many government-run enterprises become targets for acquisition, domestic companies are actively exploring M&A opportunities with international corporations.
Recent analyses of cross-border mergers and acquisitions (M&A) in Vietnam have offered comprehensive insights into the landscape of foreign-related transactions in the country These studies aim to clarify key aspects of these deals, providing a detailed overview of the current situation in the Vietnamese market.
Reasearches of the M&A’s impacts on Vietnam’s economy
Cross-border mergers and acquisitions (M&As) may not show immediate effects on a struggling economy, but their long-term benefits are significant They contribute to economic restructuring and facilitate a more productive reallocation of physical and financial resources Research, such as the study by Wang and Wong (2009) titled "What Drives Economic Growth? The Case of Cross-Border M&A and Greenfield FDI Activities," highlights these impacts, underscoring the role of cross-border M&As in fostering economic growth.
2 Leproux, V., Brooks, D.H (2004) “Vietnam: Foreign Direct Invesment and postcrisis regional integration” Asian Development Bank 3) Vuong, Q.H., Tran, T.D., Nguyen, T.C.H., (2009) “Mergers and Acquisitions in Vietnam's Emerging
Market Economy, 1990-2009” Centre Emile Bernheim 4) César, C., Norman, L., Luis,S., (2004) “Greenfield Foreign Direct Investment and Mergers and Acquisistions: Feedback and Macroeconomis Effects”, World Bank
Leproux and Brooks (2004) highlighted the crucial impact of foreign direct investment (FDI) on the Vietnamese economy, emphasizing that the nation's ability to manage economic slowdowns and navigate political and institutional challenges has been key to effectively attracting and leveraging FDI for its development.
Inward foreign direct investment (FDI) plays a crucial role in enhancing a country's economy, as highlighted by Vuong, Q.H., et al (2009) It provides essential financial resources, significantly supports the development of Vietnam's economy, and creates favorable conditions for export growth Additionally, FDI improves the quality of the labor market, introduces and applies advanced technologies in domestic enterprises, and elevates labor skills significantly.
There are two different types of FDI in Vietnam, namely, greenfield investment and M&A When distinguishing these types of FDI, César,C., Norman,L and Luis,S (2004) supposed that:
The distinction between greenfield foreign direct investment (FDI) and mergers and acquisitions (M&A) is crucial, as greenfield FDI primarily involves new capital assets, potentially driving growth through increased physical investment In contrast, M&A focuses on the transfer of existing assets, likely enhancing productivity growth instead.
The growing significance of mergers and acquisitions (M&A) in total foreign direct investment (FDI) flows has been identified as a potential reason for the observed decline in the empirical link between FDI and investment during the 1990s Consequently, not differentiating between the two types of FDI flows amid substantial shifts in their relative proportions over the past decade may skew conclusions regarding the relationship between total FDI, investment, and economic growth.
Wang and Wong (2004) question whether Greenfield investment is preferred over M&A, noting that in Vietnam, the effectiveness of either strategy depends on the quality of preparation and human resources Calderon et al (2004) highlight the significant growth of M&A in Vietnam since the 1990s, with foreign direct investment (FDI) in Greenfield projects reaching $13.1 billion in new commitments and $10.5 billion in disbursements, reflecting declines of 15.3% and 4.9%, respectively Conversely, there has been an increase in FDI through cross-border M&As, as reported by the Ministry of Planning and Investment.
“M&A bright images appear” (21 st January, 2013) reported by Ngoc Linh
In recent years, Foreign Direct Investment (FDI) in Vietnam has predominantly been driven by Greenfield Investment, according to Nguyen Mai, chairman of the Vietnam Association of Foreign Invested Enterprises However, there is a notable shift as cross-border mergers and acquisitions (M&A) are increasingly gaining importance in the FDI landscape.
This chapter provides a theoretical foundation for M&A activities, particularly focusing on cross-border M&A related to foreign direct investment (FDI) in Vietnam While previous studies have analyzed this situation and highlighted government policies aimed at facilitating foreign investment, they often lack recent updates and fail to address unresolved issues Notably, the cross-border M&A landscape in Vietnam from 2008 to 2012 remains inadequately systemized This thesis aims to fill these gaps by offering a more comprehensive analysis of the current M&A environment in Vietnam.
To address the identified issues, the thesis employed the methodology of dialectical materialism rooted in Marxism and Leninism Additionally, a combination of collective analysis and statistical data was effectively utilized to illustrate key figures In analyzing M&A activities in Vietnam, distinct research periods were established to facilitate comparisons, providing evidence that highlights the unique characteristics of each year, period, and deal.
Selection of subject
Participants
Since the thesis is the secondary research, there are no participants in the progress of collecting and analyzing the theme, except the own views and evaluation of author.
Materials
This research focuses on foreign investors' mergers and acquisitions (M&A) in Vietnam from 2008 to 2012, utilizing carefully selected and classified sources, including regional and global reports A comprehensive analysis of numerous articles is conducted, emphasizing M&A theory, types, and real-world applications All sources are credible, originating from both domestic institutions like VCCI, CIEM, and MOF, as well as international organizations such as the United Nations, World Bank, and Asian Development Bank, along with consulting firms like Stox Plus, KPMG, and PwC These materials will serve as the foundation for further analysis, which will be detailed in the subsequent section on data collection instruments.
Data collection instruments
The research utilizes graphs, charts, figures, and tables to illustrate M&A activity trends over time, presenting statistics on the numbers, rankings, and proportions of elements involved in transactions These data collection instruments provide an objective and precise foundation for evaluating and comparing findings, ultimately leading to well-supported conclusions.
Procedures of collecting data
The procedure can be clarified into three following phases:
Phase 1 Reading and choosing the documents
During this phase, the author conducted extensive online research to identify authentic sources and gathered references from the library, as well as following the supervisor's guidance This process involved careful evaluation of the materials to determine their relevance and reliability, ensuring that only the most useful information was selected for the topic.
During this phase, the primary focus was on thorough reading and identifying key points The author created a mind map to clarify their approach and began developing an outline.
Phase 3 Finding and drawing graphs and tables
Finally, when the author had the main points and the thesis’s frame work, the graphs and tables were collected to make the points more persuasive and descriptive.
Procedures of data analysis
After collecting the data, the next task was to spent time narrowing down the scope of data The most necessary ones remained and were used to illustrate the
19 contents Some of them were kept to compare the results and findings after analysis finished
This chapter clearly outlines the methods and procedures for data selection and analysis The subsequent chapter, RESULTS AND FINDINGS, will present the relevant research points, graphs, and statistics derived from the data collection and analysis.
This section will address the research questions by focusing on a specific feature in the data collection process Following this, the data analysis will yield results and findings that not only reinforce existing conclusions but also introduce new insights.
The real situation of M&A activities of foreign investors in Vietnam in the global
Real situation of M&A in Vietnam by value and by deal
Figure 1: „M&As continue to help drive the economy”
Despite recent fluctuations, Vietnam's transactions market has continued to develop, with a slight downward trend in M&A activities The chart illustrates that both the value and number of M&A deals in Vietnam have remained consistent.
21 increasing in the period 2008-2011, except for early 2012, there was a noticeable reduction
The total value of M&A increased up to USD$ 3.5 billion ( from 2008 to
2011) and suddenly fell down in the early of 2012 at USD$ 1.99 billion Compared with the number USD$3.20 billion in 2010 and USD$ 4.40 billion in
2011, the total value in 2012 revealed the signal of downward M&A
Concerning to the total closed deals, there was the same trend of M&A The number of deals was increasing substantially through the period 2008-2011 but witnessed the dramatical decrease in 2012
Recent statistics indicate that domestic mergers and acquisitions (M&A) represent approximately 77 percent of the total volume of activity, while cross-border deals dominate by value, accounting for 66 percent of the total deal value.
Figure 2: Vietnamese M&A deals by number 2011 Source: IMAA, “Mergers and Acquisitions: Vietnam Report 2011”, 17 January
Figure 3: Vietnamese M&A deals by value 2011
Source: IMAA, “Mergers and Acquisitions: “Vietnam Report 2011”, 17 January
M&A by sectors
Figure 4: Transactions numbers by the key sectors
Source: Capital IQ (note: The numbers inside are the numbers of M&A deals and the sizes of the circles indicate the robustness of M&A activities)
In Vietnam's economy, the financing and consumption sectors have dominated mergers and acquisitions (M&A), surpassing industrials and real estate Notably, the number of deals in these sectors plummeted from 40 in 2010 to just 4 in 2012, yet they remain the most attractive for foreign investors Statistics reveal that the total value of M&A deals in the consumption sector reached $1 billion, accounting for approximately 25% of the overall M&A value in Vietnam Between 2011 and 2012, there were six inbound deals totaling $983 million, primarily involving financial services and real estate developers.
14 deals totaling US$329 million, according to Stox Plus (15, May, 2012)
The financial services sector has attracted significant investor interest, evidenced by its dominance in M&A deals in Vietnam Intense market competition compels smaller banks to pursue external capital for expansion and technological advancement Inbound M&A transactions are seen as more effective than domestic ones for achieving these goals Additionally, the ongoing restructuring of Vietnam's banking system is expected to lead to the acquisition of many weaker banks in the near future.
The real estate sector has faced significant challenges recently, leading to reduced M&A activity compared to other industries Many transactions remained private, primarily involving negotiations between domestic companies and foreign acquirers Despite these difficulties, cross-border M&A activity in real estate has been on the rise, particularly between 2008 and 2011, when both the number and value of deals increased alongside trends in the financial sector By early 2012, real estate transactions even surpassed those in the consumer goods sector, traditionally seen as the most appealing for foreign investors.
The real estate sector is currently facing significant challenges, primarily due to an oversupply of inventory and rising interest rates Many real estate companies are grappling with a severe crisis as they struggle to manage their excess stock.
The real estate sector is experiencing significant pressure due to stricter regulations, prompting companies to restructure their operations As a result, similar to the financial sector, real estate firms are increasingly seeking mergers and acquisitions (M&A) to navigate these challenges effectively.
M&A by types
Source: StoxPlus_”M&A research report” 15, May2011
Despite the significant growth of inbound mergers and acquisitions (M&A) in Vietnam, the outbound sector has remained relatively quiet Data shows that foreign investors accounted for 66% of the total value and 77% of the total number of M&A deals in Vietnam, which reached $4 billion in 2011, according to SEIKO Ideas This highlights the strong interest and participation of foreign entities in Vietnam's M&A landscape.
In light of Vietnam's declining economy, enterprises are increasingly prioritizing their domestic market presence over pursuing outbound mergers and acquisitions, as limited capital constrains their ability to invest overseas.
M&A by country
Europe and Japan were on the top three entering Vietnam’s market by M&A deals( counted by both volume and value)
Figure 5: Top foreign buyers in 2011 by volume and by value
Japanese companies have been the largest contributors to Vietnam's capital through M&A activities, with a cash flow of approximately $596 million in 2011 This investment primarily targeted the rapidly growing consumption and financial sectors, which have attracted interest from numerous foreign financial institutions, as noted by SEIKO Ideas on May 24, 2012 The accompanying graph illustrates this trend clearly.
Figure 6: Foreign Direct Investment from Japan Sources: Japan External Trade Organization; ADB estimates
In 2011, Japanese investments in Vietnam comprised 21 deals worth a total of $941 million, while 2012 saw 14 deals amounting to $1.15 billion Notable transactions included BTMU Bank's $743 million investment in Vietinbank and Sumimoto Life Insurance's $340 million acquisition of a strategic stake in Bao Viet Group from HSBC Additionally, Japanese companies have shown increasing interest in various sectors, including food services and packaging.
Japan has secured the top position in deal value and ranks third in deal volume, driven by Japanese investors' strategic approach to M&A They focus on sectors and domestic companies with high potential, leveraging their technology, experience, and cultural business practices to maximize profits Unlike other investors, Japanese firms are cautious and do not invest large sums without thorough consideration This careful investment philosophy is shared by European and American investors, as illustrated in Figure 3.
The following charts help us to see the top of M&A deals that were mostly conducted by the foreign investors , some of these oustanding deals were once
In 2011, Mizuho Corporate Bank from Japan invested $567 million to acquire 347.6 million shares of Vietcombank, while in 2012, Glico purchased 14 million shares, or a 10% stake, in Kinh Do Company, marking its entry into the Vietnamese market, as reported in Business Brief 2/2 (2012) by Vietnamnet.
Japan was on the top list investment followed by China As estimated, in
2011, China invested US$ 609 million and 12 545 billion VND In the article
Between August 2011 and 2012, Singaporean investments in Vietnam surged, with a total deal value reaching US$72 million This accounted for 9% of the total number of mergers and acquisitions (M&A) and 3% of the overall value of M&A activities in Vietnam during that period.
Figure 7: Top 10 deals in four months to 30/4/2012 (USD million) and
Top 10 M&A deals in 2011 (USD million) Source: Capital IQ_Data 2012
Vietnam has experienced a record surge in foreign investor mergers and acquisitions (M&A) over the past decade, indicating a trend of increasingly active investment activities anticipated in the future.
The cross-border M&A’s impacts
Good impacts
Vietnamese companies face significant challenges due to intense competition, limited economic scale, and a lack of qualified labor and financial skills, often resulting in a disadvantage in the market To thrive amidst these difficulties, small businesses must focus on cost reduction, enhancing market presence, exploring international opportunities, attracting potential customers, and adopting modern technology and expertise These challenges create an uneven playing field, making consolidation and acquisition essential strategic solutions for domestic firms to navigate this competitive landscape effectively.
Mergers and acquisitions (M&A) provide significant tax benefits for the acquiring firm, as well as advantages for the target company By leveraging the tax losses from inefficient production, the newly merged entity can reduce its overall tax burden, resulting in lower taxes compared to when the companies operated separately This collaboration alleviates tax pressures for both parties, allowing the acquirer to minimize tax payments while the target company benefits from reduced tax obligations.
Cross-border mergers and acquisitions (M&A) provide significant benefits to domestic companies by diversifying their goods and services Facing production challenges and revenue losses, Vietnamese firms can leverage foreign-related M&A to access more attractive products and services This strategic move is crucial for enhancing economic scale, increasing market influence, and ultimately driving business growth.
The acquiring company's protection allows the target company to enhance operational efficiency, expand its economic scale, and address existing challenges, provided that market competition remains equitable This scenario typically arises in mergers and acquisitions (M&A) involving two distinct types of businesses.
The report "Ca lon diu ca be" (2012) by Doanhnhansaigon.vn highlights the successful merger of Masan Group with Vinacafe Bien Hoa, which significantly boosted Vinacafe's business performance Following the merger, Vinacafe's revenue surged to 528 billion dong in 2012, up from 285 billion dong in 2011 The share price also experienced remarkable growth, increasing from 95,000 dong in October 2011 to 219,000 dong by February 27, 2012 This success can be attributed to Masan's effective management and strategic business initiatives, indicating a promising future for Vinacafe's efficiency and profitability.
Vinacafe had no competitors in the same field of business so that the bad effects of competition did not happen
Mergers and acquisitions (M&A) significantly enhance domestic firms by improving workplace conditions and efficiency through better management and modern technologies The acquiring company introduces innovative working styles and training, fostering a positive cultural shift within the business Additionally, the restructuring process often involves the reduction of excess and inefficient labor, which helps reshape employee attitudes towards a more competitive business environment.
The government views foreign investment in M&A activities as a strategic approach to tackle economic challenges, as it brings numerous benefits to the host country's economy.
Domestic consumers now enjoy a wide range of product choices, with better quality goods available at more affordable prices Previously, international standards were not associated with low costs; however, this has changed with the recent economic opening and the surge in mergers and acquisitions.
Foreign-related mergers and acquisitions (M&A) play a crucial role in financing the economy, effectively addressing the significant capital demands of domestic companies As many firms seek external financial sources due to the limitations of the national economy, these investments alleviate the capital burden on the government, fostering a more dynamic domestic market.
Thirdly, the low infrastructure of Vietnam has been one of the obstacle preventing the investors from reaching the national market By cross-border
Mergers and acquisitions (M&A) enable economies to integrate advanced technologies from international companies, facilitating the application of essential know-how for optimal development This process not only attracts more foreign investors but also boosts the efficiency of the domestic market.
M&A activities play a crucial role in addressing labor issues by enhancing worker qualifications and skills Vietnam's young and cost-effective workforce is a significant attraction for foreign investors However, economic instability has led to numerous business failures, rising unemployment, and a lack of skilled labor, posing serious challenges Consequently, jobs generated through M&A transactions provide valuable opportunities for employment and skill development for Vietnam's workforce.
The national economy, despite having certain advantages such as resources and labor, faces challenges in its operational and management styles, hindering scientific and successful functioning Consequently, when investments are made through M&A deals, it allows for the infusion of management expertise and knowledge, facilitating an efficient restructuring of the economy.
As the economy shows signs of decline, production output tends to decrease Meanwhile, the population continues to grow, increasing the demand for goods and services To address this rising demand, mergers and acquisitions (M&A) can be an effective strategy alongside leveraging the country's economic potential By expanding economic scale and market reach, M&A can enhance productivity and help stabilize the economy.
Successful mergers and acquisitions (M&A) lead to a more open national economy and enhance the integration process Improved regulatory frameworks that align with international agreements make it easier for investors to engage in new ventures.
32 the Vietnam’s market The field of business is varied and a multi-sector economy will be set up.
The bad impacts
It could be denied that the foreign-related M&A benefited the domestic enterprise and the economy, yet, many concerns have been existed since the M&A activities bloomed
International mergers and acquisitions (M&A) are predominantly executed by large corporations, often targeting smaller companies This trend leads to inevitable outcomes where the larger firms fully divest the smaller entities As a result, the acquired companies face several challenges: they may experience restrictions imposed by the acquirers, risk total absorption into the larger entity, and potentially expose themselves to financial risks when agreeing to an M&A deal.
Many M&A deals are characterized by hostile transactions aimed at taking control and establishing monopolies within the target company Acquirers often devalue domestic firms to gain complete control over the system, particularly in high-growth sectors that yield substantial profits By taking over these domestic companies, they manipulate market prices and exert significant influence over local businesses.
In the early 1990s, Da Lan toothpaste, produced by the cosmetic company Son Hai, gained immense popularity in Vietnam, capturing 95% of the Northern market and 70% in Central Vietnam However, the brand's success came to an abrupt end when the chairman decided to sell it to Colgate for $3 million in 1995, marking the conclusion of a decade-long presence in the market.
The acquisition of the trademark for up to US$20 million ultimately led to significant market share loss for Da Lan, resulting in a dramatic decline in business performance This outcome starkly contrasted the chairman's expectations of leveraging modern manufacturing and management technologies In hindsight, this deal is regarded as the biggest mistake of his career.
Smaller enterprises that rely entirely on foreign investors for funding face significant financial risks, as they must adhere to the decisions and strategies set by their investors, leaving them with little market influence Although these domestic companies aim to enhance their competitiveness and production efficiency through external funding, they are vulnerable to the potential withdrawal of financial support and mismanagement of funds by the parent company Consequently, they find themselves in a challenging situation where they cannot sustain production without the investors' backing, nor can they explore alternative funding sources.
Amid a surge in M&A activities, the government faced an economic dilemma, responding with mixed reactions to potential regulatory amendments Aiming to attract international investment, they introduced flexible taxation policies and favorable social conditions However, to prevent monopolistic practices by international corporations, they also established legal barriers.
Multinational corporations (MNCs) have progressively taken on dominant roles in the economy, leading to the decline of traditional industries This shift has altered the market structure, allowing these corporations to monopolize economic activities As a result, the dynamic and innovative aspects of the economy face significant threats, leading to the misallocation and depletion of national resources.
The national economy suffers when multinational corporations (MNCs) engage in trade exchanges that affect asset valuations A high proportion of foreign assets can indicate a country's economic and political dependence Consequently, any actions taken by foreign investors—such as reallocating investments, withdrawing capital, or changing representatives—can lead to significant instability in the national economy.
Despite having access to a wider range of products and better services, consumer protection remains vulnerable Consumer behavior is often influenced by the customs and trends established by large corporations While customers may appear to have the freedom to choose, they are actually steered and constrained by fixed prices and limited options dictated by these big businesses.
High inflation can occur when economic corporations enter the market excessively, leading to unstable growth While cross-border mergers and acquisitions (M&A) through foreign direct investment (FDI) have significantly boosted Vietnam's economy, rapid development has also caused environmental issues and increased the wealth gap Additionally, unemployment resulting from economic restructuring poses a significant challenge for the government to address.
The factors impacting on M&A in Vietnam
The internal factors
Vietnam's emerging economy holds significant potential that domestic firms often overlook With a youthful and dynamic population, the country offers an attractive workforce for foreign investors According to Ernst and Young (2012), Vietnam achieves a remarkable score of 92% in population size and 85% in demographic metrics, alongside a strong 70% in innovation, highlighting its socio-economic strengths.
In a two-speed world of mergers and acquisitions (M&A), Vietnamese companies fail to leverage their abundant workforce and natural resources due to weak management and lack of experience This has resulted in inadequate development plans, unclear strategic orientation, and inefficient operational structures.
Vietnamese corporations and the government view mergers and acquisitions (M&A) as essential for accessing modern technology and achieving global integration To transform the economy, Vietnam requires a strategic approach to attract foreign direct investment (FDI) through M&A, enabling the country to adopt advanced technologies, restructure the economy scientifically, and receive effective guidance for national economic development.
Vietnam's declining stock market, credit crunch, and struggling real estate sector have made it challenging for domestic companies to secure funding due to high borrowing costs and interest rates This situation presents a significant opportunity for foreign corporations to invest in Vietnam through mergers and acquisitions (M&A), allowing them to easily acquire domestic firms that are facing financial difficulties.
Vietnam's favorable conditions for acquiring local firms, such as a supportive legal framework, access to distressed assets, and low labor costs, make mergers and acquisitions (M&A) more appealing than direct investments like greenfield projects Recognizing the rising trend of M&A and its economic benefits, the Vietnamese government is actively enhancing support for this investment strategy.
The evolving legal framework in Vietnam, marked by 36 new regulations, is adapting to support the increasing demand for cross-border mergers and acquisitions (M&A) Simultaneously, the global economic crisis has pushed many Vietnamese companies to the brink of bankruptcy, creating opportunities for transnational corporations (TNCs) to acquire domestic firms at low costs This situation is further exacerbated by a surplus of unemployed labor willing to work for lower wages, facilitating the entry of TNCs into the Vietnamese market.
The barriers of prices, working culture and negotiation are much easier
The lifting of price barriers has significantly enhanced the working culture in Vietnam, leading to improved job performance and collaboration among workers Vietnamese laborers have adapted to international environments and new working conditions set by foreign employers Additionally, the negotiation process between acquiring and target companies has become more streamlined, as national companies now possess a clear understanding of M&A principles and their own valuations, enabling them to engage in reasonable negotiations These positive developments have made Vietnam's market increasingly attractive to foreign investors.
The external factors
The recent decline in the global economy, particularly in the EU and the United States, shows little sign of rapid recovery Developed countries, especially in Europe, are actively seeking solutions to break free from this downward trend While the euro area's debt crisis may be contained, economic activities remain sluggish In contrast, the United States and Japan are experiencing a relatively better situation; however, uncertainties in policy continue to create instability in growth.
International investors are increasingly turning to emerging economies like Vietnam, seeking more promising markets that offer greater opportunities to meet their demands Faced with challenges and difficulties in their home markets, these investors are expanding their reach into new sectors and markets when favorable conditions begin to wane.
The aging population and increasing domestic demands are putting pressure on countries reliant on foreign investment As the number of elderly individuals rises, the motivation for local business investment declines, leading to inevitable deflation A notable example is Japan, which, despite facing significant challenges from its aging demographic, leads in mergers and acquisitions (M&A) activities in Vietnam.
“Latest statistics from the National Institute of Population and Social
Security Research show that depopulation in Japan is increasing precipitately Statistics show that Japan's population will fall from 128 million to 116 million by 2030 and to 85 million by 2060.” quoted in
“Aging population could hamper LDP's economic reform agenda” (31 December 2012), Global Times
If the national economy fails to grow sufficiently to meet rising domestic demands, companies must seek new markets to sustain their production and supply of goods and services.
Investors have the opportunity to enter the market and increase their market share through mergers and acquisitions (M&A) Successful M&A transactions are expected to enhance the value generation for the company, resulting in a shareholder value greater than that of the parent firm Leveraging economies of scale, mergers and acquisitions have demonstrated their effectiveness in achieving cost efficiency As Shelton (1988) noted, "value is created when the assets are used more effectively."
Mergers and acquisitions (M&A) can significantly enhance revenue through increased market share, demonstrating that a combined entity can generate greater value than individual firms According to Antoniou, A., Arbour, P., and Zhao, H (2011), the shareholder value created by a joint company is substantially higher than the combined value of separate companies.
Investors capitalized on the opportunity to acquire established brand names or patterns in the domestic market, utilizing mergers and acquisitions (M&A) as a strategy to preserve their capital amid market downturns By leveraging the recognition of existing brands and reputable models, they found it easier to establish a foothold in the market, eliminating the need for extensive time and resources to develop and promote entirely new products.
It was certainly the effective method to save the flow of money when it was unnecessary to launch an advertisement campaign and carry out the promotion for this
Local enterprises often overlook pricing strategies, creating opportunities for foreign companies to capitalize on Domestic firms face significant challenges in accurately assessing their own valuations, which can lead them to fall victim to strategic bids from outsiders A notable example is Colgate-Palmolive's acquisition of the Da Lan toothpaste brand in 1998 for only $3 billion, despite Da Lan holding a 30% market share At that time, Colgate-Palmolive would have needed to invest an additional $2 billion in promotional efforts to gain just 1% market share, highlighting that Da Lan was not adequately priced Consequently, the acquirer reaped substantial benefits from this undervaluation.
Policies of Vietnamese government and enterprises respond to M&A transactions
Policies of Vietnamese government respond to M&A transactions
Firstly, the government amend the specialized regulations ( as mentioned in the part 3_Legal framework for M&A in Vietnam) in the Competition Law, Enterprises Law, Law on Securities, etc
In response to the economic crisis, the government is strategically reducing non-core investments of state-owned enterprises (SOEs) This approach is essential, as it prevents the government from incurring unsustainable financial burdens when major enterprises face bankruptcy Additionally, limiting investments in non-core areas highlights inefficiencies within the national economy, allowing SOEs to focus resources on their primary business operations for improved performance.
Mergers and acquisitions (M&A) are increasingly viewed as a strategy to address economic challenges Although M&A has not been officially recognized as a definitive solution for economic crises, it consistently demonstrates its crucial impact on the economy A study by Stox Plus (2012) highlights the significance of M&A, particularly in the banking sector, showcasing its vital role in fostering economic resilience.
The topic of mergers and acquisitions among small banks has been debated for decades, yet significant action has remained elusive Currently, small banks are being held responsible for the rising interest rates, and policymakers have communicated a clear stance on the need for consolidation within this sector.
They also quoted two speeches:
“Nguyen Van Binh, the State Bank Governor, stressed “ by law, credit institutions wishing to have large capital to develop their businesses and
To expand their services, banks often need to merge and consolidate, although this decision ultimately rests with them The State Bank of Vietnam (SBV) will provide guidance and support for these mergers through its stimulating tools, but it will not compel banks to merge or take action on their behalf.
Vu Viet Ngoan, President of Vietnam Financial Supervi sory Commission also said:
When banks face potential bankruptcy, central banks globally often intervene by acquiring them Vietnam's 2010 law on credit institutions empowers the State Bank of Vietnam to purchase stakes in commercial banks, enabling it to take control and prevent their collapse.
Vietnamese enterprises policies respond to M&A transaction
Mergers and acquisitions (M&A) serve as a strategic means for companies to expand, particularly during challenging economic times when survival hinges on such actions The essence of M&A lies in synergy, where the integration of two companies enhances their overall strength and viability Consequently, this collaboration often leads to an increase in market prestige and a significant rise in the stock prices of the involved companies.
M&A activities can serve as a defensive strategy in corporate acquisitions According to Stox Plus (2011), two classic approaches are the White Knight strategy, where a target company seeks a friendly partner to avoid a hostile takeover, and the Pac-Man Defense strategy, where the target firm attempts to acquire the hostile bidder In Vietnam, various M&A deals have been utilized as a means to counteract acquisition attempts.
Stox Plus (2011) also gave an example to illustrate the strategy: “Company
Company A, facing the threat of a takeover, has implemented a merger and acquisition (M&A) strategy by acquiring Company B from its relatives This successful transaction enhances the equity of Company A's current owners while diluting the shares of the hostile acquirer, thereby decreasing the likelihood of a successful takeover.
Recommendations or suggestions
The prospect of M&A activities of foreign investors in Vietnam
Foreign participation in M&A activities remains a significant driver of higher-value transactions in Vietnam, particularly within the consumption, financing, and property sectors Notably, Japan continues to lead as the top M&A investor in the country.
Risks when accommodating M&A from the foreign investors
The country risks facing unsustainable economic growth, as mergers and acquisitions (M&A), while effective for stabilizing and restructuring the economy, can lead to adverse effects if not managed carefully Without strategic guidance, rapid growth and excessive cash flow can result in high inflation and market inequality, posing significant challenges to economic stability.
Despite the significance of large mergers and acquisitions (M&A) deals, they do not always yield effective outcomes In Vietnam, it is estimated that over 50% of M&A transactions fail, primarily due to cultural mismatches, inappropriate enterprise valuation, and inadequate human and operational management.
Unless the well-prepared plan and investigation before and after the transaction, the rate of failure is much bigger
The Vietnamese economy may face a decline in domestic sector control as foreign firms increasingly engage in hostile mergers and acquisitions (M&A) These transactions, such as Unicharm's acquisition of Diana for $128 million to penetrate the Vietnamese diaper and toilet paper market—where Diana commands a 40% market share—can undermine traditional sectors and stifle the creativity of local companies With Unicharm already holding 25% of the Asian market, Vietnam is seen as a crucial market for their expansion.
Recommendations for government and local firms to make use of the cross-
The government must prioritize stabilizing the economy, as a stable and sustainable development is crucial for attracting investments Investors are often deterred by an economy that is either overheating or sluggish, highlighting the importance of a balanced economic environment for fostering confidence and encouraging investment.
The stabilization of Vietnam's economy is essential for attracting foreign buyers, especially after recent investor concerns regarding high inflation and interest rates Ensuring economic stability will play a crucial role in shaping positive prospects for the future of Vietnam's economy.
( Linh San, May 2012 “Target Sought”, Vietnam Economic Times)
To attract foreign investors, the government must establish legal regulations that align with international standards Currently, Vietnam lacks a comprehensive law governing mergers and acquisitions (M&A), with relevant legal frameworks scattered across various provisions in Civil Law No 94 and 95, as well as the Enterprise Law, Investment Law, and Competition Law.
The complexities of the 43 provisions of the WTO pose significant challenges for both parties involved in M&A activities, highlighting a weakness in the Vietnamese government's approach To address these issues, it is essential to establish a dedicated department focused on managing, guiding, and overseeing M&A procedures.
The government must undertake a comprehensive restructuring of state-owned corporations and the banking sector to address the weaknesses and inefficiencies that have recently come to light Many large state-run firms are struggling with poor management and high debt levels, hindering their ability to compete in a challenging market Additionally, recent bankruptcies and scandals involving state-owned entities, such as Vinashin and Vinaline, have raised concerns among foreign investors regarding the transparency and effectiveness of the economy To attract investment, it is essential for the government to create a more favorable business environment by minimizing bureaucracy, reducing monopolistic practices, and enhancing the transparency of state-owned enterprises.
Firms entering Vietnam are primarily focused on low wage costs rather than tapping into the dynamic domestic market, leading to a decline in registered foreign direct investment (FDI), particularly from countries like Singapore, Hong Kong, Korea, and China, with Japan being the exception This trend indicates a concerning drop in Vietnam's competitiveness, as evidenced by its worsening position in global competitiveness rankings While the decrease in FDI inflows can be attributed in part to sluggish global growth, it also highlights Vietnam's gradual loss of appeal as an investment destination compared to other attractive markets like Indonesia and Thailand.
The restructuring of the banking sector is essential for revitalizing the economy and addressing its existing shortcomings This transformation will pave the way for effective mergers and acquisitions within the industry It is crucial for the government to prioritize strong banking operations and transparency to facilitate this process.
As emphasized in the report “Restructuring Banking System” of Central Institute for Economic Management (25 April 2013):
The government must clearly define its role in coordinating and collaborating among agencies to ensure effective restructuring of the banking system Assigning full responsibility to the State Bank for the credit institutions project could hinder progress Therefore, it is essential to create a Restructuring Commission led by the Prime Minister or a Deputy Prime Minister to facilitate this process.
To enhance the domestic banking system's growth and governance amid international economic integration, the government must establish effective scenarios and solutions to maintain control over the banking sector A well-defined pricing mechanism for bad debts, particularly those repurchased by the state budget, is essential to minimize restructuring costs Additionally, a comprehensive plan for developing the financial market should be implemented to create financial intermediaries, alleviating pressure on the banking system Ensuring market transparency is crucial; reducing red tape and bureaucracy will foster a more attractive business environment for investors.
The responsibility of protecting and developing the economy is not on the shoulders of the government only, the local firms play the absolutely vital role in
To navigate the challenges and opportunities in a rapidly evolving global landscape, Vietnamese enterprises must adopt a strategic approach to mergers and acquisitions (M&A) They should evaluate if M&A is the optimal solution to mitigate economic crises or competitive threats Transparency in government-run firms is essential, alongside fostering a cooperative business culture that respects individual identities while promoting integration Additionally, leveraging M&A can enhance value chains, and companies need to be well-prepared for the influx of inbound deals by understanding sale and purchase agreements thoroughly to safeguard their interests.
In summary, the research questions are addressed through data analysis, leading to a comprehensive overview of the main findings and recommendations presented in the conclusion.
In the concluding section of the thesis, key findings are summarized, along with recommendations for future research Through comprehensive data collection and analysis, the author has identified several significant results that contribute to the overall understanding of the subject.
The M&A market in Vietnam is poised for significant growth, particularly in cross-border transactions, despite global economic challenges This surge is primarily focused on the financial and consumption sectors, driven by the influx of foreign investments that are expected to positively transform Vietnam's economy M&A activities are essential for revitalizing the market, addressing labor issues, and enhancing the valuation of domestic enterprises To attract more effective investments through M&A, it is crucial for the Vietnamese government and local businesses to implement practical measures that improve the business environment.
Cross-border mergers and acquisitions (M&A) present a dual-edged sword for the economy and national firms, posing a complex challenge for the government It is essential for policymakers to strike a balance between leveraging the significant capital and technology brought in by foreign M&A and mitigating potential negative impacts on Vietnam's core traditional businesses Additionally, protecting small and emerging companies from the dominance of international corporations is crucial for fostering sustainable and effective economic development.
This thesis provides an informative overview of cross-border mergers and acquisitions (M&A) in Vietnam from 2008 to 2012 While M&A activities are well-established globally, they remain relatively new in Vietnam, presenting certain limitations in scope and depth of analysis Nevertheless, the author aims to create a reliable and valuable resource for future research and for stakeholders interested in this evolving market.
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