In 2017, if nothing breaks through, M&A value will not easily surpass the value in 2015 and 2016. This will require a boost from businesses and the Government to take advantage of opportunity from foreign capital flows.
In 2016, the value of worldwide M&A transaction reached 3.5 trillion USD, decreased by 27% compared with the previous year but still at a high level. This could be a sign of ending a period of global M&A growth. With such event as Brexit or the policies of US President Donald Trump, global M&A activities becomes unpredictable and there may be a shift in capital flows.
According to IMAA statistics, in Vietnam, after reaching its peak in 2015, which was a record level in the past 10 years, with an estimated M&A value of 5.2 billion USD by 2015, ending the year 2016 with a value of 5.1 billion USD. However, there are also many obstacles and there was a slowdown in the second half of 2016 when large and quality deals are announced.
The most exciting sector in 2016 is retail, consumer goods and real estate. Banking and finance seems to be quiet in the past year. Other sectors that also attracted attention are education and technology.
Foreign investors still play a significant role in M&A activities in Vietnam with huge deals. Japan is persistent in its strategic partnership with state-owned companies such as Vietnam Airlines, Petrolimex… Korea has entered the market with some industrial sectors, while Singapore is focusing on real estate projects.
In addition, the market continues to witness M&A moves and strategic investments by some private corporation when the State divests. The most typical in the past year was a divestment deal involving Vinamilk. Along with Vinamilk, a number of Vietnamese companies are still in the sights of investors such as Sabeco, Habeco and Mobifone.
The challenges for M&A growth in Vietnam are: The change in US policy, in particular the United States decided to withdraw from the TPP, obstacles from equitization in Vietnam, business quality and size of the economy. In order to achieve high M&A value like 2016, it requires the assertiveness of the State in the divestment of large corporations. At the same time, the market needs a new push & breakthrough factors.