Nguyen Cong Ai, deputy general director of KPMG Co. Ltd., said that many foreign investors want to make long-term investments in Vietnam through M&A deals rather than through the traditional foreign direct investment form.
According to data of KPMG, the total value of M&A transactions in Vietnam reached US$4.4 billion in 2011, versus US$3.2 billion in 2010.
The number of transactions also increased significantly, with 262 successful deals last year compared to 236 in 2010 Such a figure shows that the total M&A value last year did not pick up sharply, Ai told the Daily yesterday.
Notably, apart from the financial investments of private funds, there are investments of strategic investors.
Among the investors in Vietnam via M&A activity last year, there are many large and well-known enterprises. Many of them, especially those from Japan, are seeking investment opportunities to do long-term business in Vietnam.
M&A deals with involvement of Japanese investors used to take 2-3 years, but such transactions only took nearly a year to complete in 2011. These positive signs are predicted to carry on into 2012, said the representative of the experienced company in M&A consultancy.
Giving explanation for the higher number of M&A deals last year, Ai said local business owners have felt the need of cooperation for mutual development. M&A transactions are not simply selling businesses but actual cooperation between related parties, he stated.
“In addition, in 2011, due to the general economic woes and the troubled stock market, Vietnamese enterprises did not demand unreasonably high prices as before, but compromise to find a common voice with investors. To foreign investors, the retail market with 90 million people in Vietnam is really attractive, given their long-term strategies for risk allocation,” said Ai.
He informed Japanese investors show interest in acquiring real estate projects, such as the operational office buildings.
In 2011, 29 takeover deals were successfully conducted, compared to 18 in 2010. Ai said he did not know how many of these transactions had involvement of Japanese investors, but it must be quite a few.
He noted Japanese are not speculators, but long-term investors. They only invest in the sectors whose potentials are considerable to them.
Ai predicted Japanese investors would boost investment in the property sector, especially the office building projects at reasonable prices.
Source: The Saigon Times Daily