More and more foreign investors looking for potential M&A opportunities in Vietnam

Investors from Japan, the Republic of Korea (RoK), and Singapore are looking for more potential merger and acquisition (M&A) opportunities in Vietnam, pinning high hopes on the long-term growth prospects of the market.

According to Masataka “Sam” Yoshida, head of the Cross-border M&A Division of RECOF Corporation of Japan, Japanese companies are striving to sign strategic agreements with Vietnamese partners.

Yoshida said Vietnam is Japan firms’ most preferred destination thanks to its economic resilience with high growth potential on the basis of the diplomatic relations between the two countries.

Related: Here’s how to acquire a business in Vietnam as a foreign investor

The Southeast Asian nation is also transitioning from production to a consumer market, he noted, adding that these favourable factors will attract more Japanese companies to the country.

In November 2022, Vietnam continuously recorded M&A deals from Japanese investors. Most recently, the Cool Japan Fund announced that it will pour about 10 million USD into 4P Holdings – the firm that owns and operates the 4P pizza restaurant chain. This is part of the fund’s strategy to exploit opportunities from the Vietnamese food and beverage market.

Meanwhile, Japanese gas supplier Toho Gas has signed a strategic investment cooperation agreement with Phuc Sang Minh Engineering Services Trade Co., Ltd to buy 40% of shares of the Vietnamese gas supplier.

Similarly, Sumitomo Mitsui Banking Corporation will invest 240 billion VND (over 9.7 million USD) in Smart Net Trading Service JSC (SmartNet).

Pharmacity, one of the largest drugstore chains in Vietnam, has joined SK Group, with the aim of entering Southeast Asia’s rapidly expanding retail and healthcare markets. The deal is believed to be one of the landmark deals of the year.

Meanwhile, SK E&S, the largest private renewable energy operator of the RoK, signed an agreement worth 37.5 million USD to buy a 99.99% stake in New Renewable Energy JSC No.1, which is a subsidiary of Gia Lai Power Electricity JSC to set a foot in the renewable energy sector in Vietnam.

The signing of billion-USD deals between Vietnamese and RoK firms have shown confidence of Korean investors in their Vietnamese partners.

Hana Financial Group has established a strategic partnership with the Bank for Investment and Development of Vietnam (BIDV). Vietnam also witnessed the strategic investment of Shinhan Financial Group of the RoK in Tiki – Vietnam’s leading e-commerce company in May this year.

Hanh Nguyen, a lawyer of Bae, Kim & Lee Vietnam, said in the first 10 months of this year, 370 million USD was poured into Vietnam through M&A deals by Korean investors.

It is forecast that more and more Korean corporations will join and increase their presence in Vietnam through M&A deals in the coming time.

This year, a member investment fund of Temasek Holdings of Singapore also inked a 50-million-USD deal with Vietnamese e-commerce solution provider OnPoint.

In addition, Singaporean venture capital funds have increased their presence in the Vietnamese market through investments in local startups.

Recently, Dat Bike, an electric motorbike start-up of Vietnam, has announced that it has successfully raised an additional 8 million USD in a funding round led by Singapore-based Jungle Ventures Fund. GSR Ventures and Delivery Hero Ventures also participated in the round, along with Wavemaker Partners and Innoven Capital.

In August, Jungle Ventures also poured 8.5 million USD into in local insurance and healthcare platform Medici.

Meanwhile, Golden Gate Ventures, a Singapore-based venture capital fund, has set up two offices in Vietnam to invest in technology industry. Another venture fund, the Quest Ventures, is also partnering with Enterprise Singapore to implement the GIA Acceleration Programme to assist Singaporean tech startups and small- and medium-sized enterprises (SMEs) to enter the Vietnamese market./.

@ Vietnam Insider/ Vietnam News Agency (VNA)