M&A activities show signs of recovery

Workers at a SABECO factory in HCM City, southern Việt Nam. VNA/VNS Photo

HÀ NỘI - Mergers and acquisitions (M&A) activities in Việt Nam have been showing signs of recovery in recent months as several large companies announced finished deals, which may create a ripple effect in the M&A market.

In recent developments, the Saigon Beer, Alcohol and Beverage Corporation (SABECO) said it intends to spend more than VNĐ800 billion (US$31.6 million) to acquire Saigon Binh Tay Beer JSC (SSB), which could bring its stake to 59.6 per cent, equivalent to nearly 52.2 million shares, making it the parent company, if successful.

SABECO has also shown its intention to buy shares worth of VNĐ100 billion to raise its stake in Saigon West Beer JSC (WSB) as well as an additional purchase of another two million shares in the future.

Masan Group (MSN) has also revealed a plan to spend $200 million to raise its stake in WinCommerce, a retail chain of 130 WinMart supermarkets and more than 3,600 WinMart+/WIN convenience stores nationwide.

Meanwhile, KIDO has completed an agreement, raising its ownership in Hùng Vương Corporation to 75.39 per cent, after selling off 51 per cent stake in one of its subsidiaries, Kido Foods. Mitsui & Co has officially become a strategic shareholder in Tasco Auto, a subsidiary of Tasco. Although details have not been disclosed, it was expected to impact Việt Nam’s IT and transport sectors significantly.

In the logistics sector, Viconship (VSC) recently completed the acquisition of the Nam Hải Đình Vũ Port JSC with an investment of nearly VNĐ400 billion, the equivalent of nearly all the charter capital of the latter.

Securities firm VIX officially became a major shareholder of PC1 Group JSC by spending nearly VNĐ400 billion to acquire more than 10.8 million PC1 shares, raising its total holding to 17.3 million shares, equivalent to a 5.56 per cent stake. On July 1, Eximbank (EIB) said VIX Securities has become one of its second-largest shareholders, holding 62.3 million EIB shares, equivalent to 3.58 per cent of its charter capital.

In the first half of 2024, a series of major deals in the real estate sector took place. Japan's Nishi-Nippon Railroad acquired a 25 per cent stake in the Paragon Đại Phước Project and Tripod Technology Corporation purchased an 18-ha industrial plot from Sonadezi Châu Đức Corporation (SZC).

Market insiders said for many Vietnamese businesses, M&A remains the quickest way to scale up and expand their market. This is particularly true for smaller businesses, which benefit greatly from the resources and expertise of larger corporations. Meanwhile, larger corporations can acquire projects with a ready-made platform, workforce, and customer data at more affordable costs.

In the property market, M&A is crucial for businesses struggling with cash shortages. Facing greater cash pressure in the remaining months of the year motivates businesses to diversify and become more active in pursuing M&A deals. The right deals can also enhance competitiveness as property developers prefer working together to create additional value rather than competing against each other.

Market insiders, however, said it might be a while before an effect can be felt in the stock exchange as investors have been shifting away from following sensational M&A news to carefully studying businesses’ performance and ability, as well as whether businesses can pull off those deals.