Signs of market revival

The mergers and acquisitions (M&A) market in Vietnam is showing signs of recovery in the final months of the year, with many companies announcing the completion of transactions.

The mergers and acquisitions (M&A) market is becoming more active in the last months of the year. In the photo: Hung Vuong Plaza after M&A under the control of KIDO (Photo: Le Toan)

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Recently, major companies in the market have come into the spotlight with notable transactions. One of the new developments is that KIDO Group is continuously increasing its ownership stake in Hung Vuong Group, leading to control of Hung Vuong Plaza.

By the end of August 2024, KIDO completed the deal, increasing its ownership in Hung Vuong Corporation to 75.39%. This move has turned Hung Vuong Corporation into a subsidiary of KIDO, with Hung Vuong Plaza now owned by KIDO.

KIDO also joined the list of M&A deals in the food and beverage (F&B) industry, with 51% of its shares in its subsidiary Kido Foods sold to Nutifood. Kido Foods is one of the largest ice cream companies in Vietnam, owning two famous brands, familiar to millions of Vietnamese consumers, Celano and Merino.

Entering the Vietnamese ice cream market in 2003, after more than 20 years of development, Kido Foods has become the enterprise with the number one market share in the ice cream production and trading sector in Vietnam and has continuously held the "throne" for many years.

Euromonitor statistics show that Kido Foods' sales have grown impressively year by year, holding over 40% of the market share from 2019 to present, despite fierce competition from many domestic and foreign "giants". Euromonitor figures also show that in 2023, Kido Foods will continue to lead the ice cream industry with a market share of 46.7%. Of which, Merino and Celano alone account for 25.9% and 19.6% of the market share, respectively, higher than the figures of the second and third ranked units in the rankings.

Currently, Kido Foods owns 2 modern processing factories with advanced technology, machinery imported entirely from Europe and Japan to meet the ice cream demand of the entire market. Besides ice cream, this enterprise also makes its mark with delicious, high-quality, nutritious and healthy yogurts.

According to Mr. Tran Bao Minh, Vice Chairman of the Board of Directors of Nutifood, investing in Kido Foods allows Nutifood to expand into the field of healthy nutrition through products that serve the needs of enjoyment. This deal also allows Nutifood to own a frozen food distribution system with hundreds of thousands of ice cream cabinets covering a wide range of traditional and modern retail points, restaurants, hotels, and entertainment venues across the country. This is also a necessary foundation to help Nutifood expand into the frozen food industry quickly and effectively.

The addition of new member Kido Foods with 2 number 1 brands in the ice cream industry in Vietnam, Celano and Merino, promises to help Nutifood expand its product ecosystem, better meeting the increasingly diverse needs of consumers, especially in the youth and adult segments.

Another important deal that has attracted widespread attention is the recent announcement that Mitsui & Co. has officially become a strategic shareholder in Tasco Auto, a subsidiary of Tasco. Although the exact value has not been disclosed, the transaction is expected to provide a significant boost to the IT and transportation sectors.

In the logistics sector, Viconship recently completed the acquisition of Nam Hai Dinh Vu Port, with an investment of nearly VND399.99 billion (US$16 million) out of the total charter capital of VND400 billion of Nam Hai Dinh Vu Port JSC, equivalent to 99.99% of shares.

In the first half of 2024, a series of important transactions in the real estate sector took place. In particular, Nishi-Nippon Railroad (Japan) bought a 25% stake in the Paragon Dai Phuoc Project and Tripod Technology Corporation bought an 18-hectare industrial land plot from Sonadezi Chau Duc Joint Stock Company.

M&A deals involving major industry players will boost the market in the final months of the year.

In early September, Masan Group announced plans to invest $200 million to acquire a 7.1% stake in WinCommerce from SK Group. WinCommerce operates a retail chain that includes more than 130 WinMart supermarkets and more than 3,600 WinMart+/WIN mini-supermarkets.

Similarly, Sabeco announced its intention to allocate more than VND800 billion to acquire Saigon Binh Tay Beer Joint Stock Company (Sabibeco Group). A successful transaction will increase Sabeco’s stake in Sabibeco to 59.6%, equivalent to nearly 52.2 million shares, making Sabeco the parent company of Sabibeco.

After acquiring Nam Hai Dinh Vu Port, Viconship is also looking to divest from Dinh Vu Petroleum Services Port JSC. The company aims to sell all 8.82 million shares of Dinh Vu Petroleum JSC at a minimum transfer price of VND88.2 billion.

Several deals were also announced in the first week of September, including ASKA Pharmaceutical Co., Ltd. (Japan) expressing its intention to acquire 35% of shares in Ha Tay Pharmaceutical JSC.

According to Ms. Trang Bui, CEO of Cushman & Wakefield Vietnam, industrial real estate is the focus of foreign investors in M&A, after Singapore's Mapletree Logistics Trust recently invested more than 50 million USD to buy 2 Grade A warehouses in Binh Duong and Hung Yen provinces. In addition, CapitaLand Investment plans to inject an additional 70-110 million USD into Vietnam in the next 2 years to develop or acquire industrial parks.

Capital flow blocked, pursuing M&A

Divestment and M&A are playing an important role as solutions for many businesses during the long period of blocked capital flow.

Names that can be mentioned include Construction Investment Development Corporation, Vinaconex, Phat Dat Real Estate Development Corporation, Hoa Binh Construction Group Corporation, Nam Long Investment Corporation and VRC Real Estate Investment Corporation, along with many other names strategically divesting from subsidiaries, affiliates and liquidating assets to stabilize cash flow.

Specifically, Hoa Binh Construction has successfully divested all shares in its subsidiary, Hoa Binh Construction Design Consulting Co., Ltd. The company also divested all shares held in its affiliated companies, Anh Viet Mechanical and Aluminum Glass Joint Stock Company and Jesco Hoa Binh Joint Stock Company.

Nam Long Investment completed the transfer of 25% of shares in the Nam Long Dai Phuoc Project (area of ​​45 hectares) to partner Nishi Nippon in June 2024, earning nearly VND200 billion (USD9.4 million) in after-tax profit.

Similarly, VRC Real Estate also successfully transferred a segment of ADC residential area in Phu My ward, Ho Chi Minh City.

Phat Dat Real Estate said that the sale of all 49% of shares at BIDICI Real Estate Investment Joint Stock Company is almost complete, opening up the company the opportunity to accumulate more than 1,400 billion VND to stabilize capital flow.

Vinaconex completed the divestment of capital at Van Ninh International Port, worth nearly VND199 billion. Hai An Transport and Stevedoring Joint Stock Company plans to divest capital at Luu Nguyen Cai Mep Port Services Joint Stock Company (51.54% of shares, equivalent to VND124 billion).

Other companies such as Trung Nam Group, Sam Holdings and Vietnam Airlines are also divesting from subsidiaries.

SGI Capital stressed that divestment and asset sales strategies are key for large enterprises to focus on core businesses and maintain profit growth. In recent months, the real estate and construction sectors have witnessed a series of M&A transactions.

In the real estate sector, M&A is important for companies facing cash shortages. Transactions are focused on projects with clear legal status and growth potential, expected to increase sharply by the end of the year. Industrial real estate is set to attract foreign direct investment (FDI) from M&A transactions.

Although the peak of the liquidity challenge has passed, ongoing market pressures will prevent businesses from taking advantage of low interest rates. Notably, the end of the year is the time when companies need to restructure debt, navigate liquidity risks and consider increasing divestments and M&A to maintain stock prices and retain major shareholders.

In addition, experts emphasize that real estate M&A is not just about accumulating assets, but has become a strategic move to enhance the competitiveness of businesses in the market. The focus shifts from competition and confrontation to investment and cooperation, aiming to create common value for progressive development.

Experts predict an increase in real estate M&A activities later this year. Transactions will be driven by both domestic and foreign enterprises.

In fact, many Vietnamese businesses still consider M&A as a way to grow quickly, especially in the current context. Businesses can buy projects, with available platforms, available personnel, and user data from competitors at a more reasonable price than before, to gain an advantage and be more competitive.

This is a good strategy, becoming more and more popular in Vietnam. Start-ups are also following this trend to save time. Moreover, there are also many start-ups that are struggling and want to sell their companies.

Ms. Le Hoang Uyen Vy, Chairwoman of the Vietnam Private Capital Agency (VPCA) and CEO of Do Ventures, believes that strong FDI inflows, supported by new-generation Free Trade Agreements (FTAs), will create a more favorable environment for IPO and M&A activities in Vietnam in the future. These factors help increase the attractiveness of the market, increase access to capital, and promote innovation and strategic cooperation, bringing sustainable growth to the IPO and M&A market.

Source: https://baodautu.vn/dau-hieu-hoi-sinh-thi-truong-mua-ban—sap-nhap-tai-viet-nam-d227913.html