The mergers and acquisitions (M&A) market in Vietnam experienced a 23% year-on-year decline in the first 10 months, totaling US$4.4 billion. Despite the challenging global conditions, it is unlikely to match the previous year’s $6.18 billion, as stated by professional services company KPMG. However, the silver lining is the notable increase in the average deal value, reaching $54.5 million, a 3.5-fold rise and the highest since 2008. Warrick Cleine, President and CEO of KPMG Vietnam & Cambodia, emphasized that this reflects an improvement in the quality of deals.
The most significant transactions included Sumitomo Mitsui Banking Corporation’s acquisition of a 15% stake in VPBank for $1.4 billion and ESR Group’s purchase of stakes in warehouse leasing company BW Industrial for $450 million. Other noteworthy deals involved Thomson Medical Group acquiring FV Hospital in Ho Chi Minh City for $381 million and Bain Capital investing $200 million in retailer Masan Group.
Breaking down the sectors, the finance industry accounted for 47% of the deals, followed by property at 23%, and healthcare at 10%. Japanese investors led in investment, contributing $1.6 billion, followed by Singapore with $1.1 billion and the U.S. with $472 million.
While analysts anticipate a modest year for the M&A market in 2024, there are long-term opportunities, and experts project Vietnam’s M&A market to reach $20 billion in the next three years. Minister of Planning and Investment Tran Duy Dong highlighted that the recovery of the economy and business growth will attract M&A interest from foreign companies soon.
Masataka Sam Yoshida of consulting firm RECOF mentioned that the Vietnam market is currently ideal for Japanese firms to enter or expand, with 85% of his company’s activities involving investments in Vietnam. However, he emphasized the need for improvements to attract more investment, pointing out that it takes 12 months to complete an M&A deal in Vietnam compared to six months in the West and three months in Japan.