Creating value after M&A

For many businesses, M&A is to continue the story of development, consolidate strength, perfect the ecosystem and long-term competitiveness.

M&A helps businesses combine strengths. In the photo: Gamuda Land's Eaton Park project after acquiring land from Tam Luc

M&A to combine strengths

Three years after purchasing shares of AAA Insurance from IAG Group (Australia), Bamboo Capital Group considers this a typical successful deal that the business is proud of during and after M&A.

Speaking to reporters of Dau Tu Newspaper, Mr. Nguyen Tung Lam, General Director of Bamboo Capital, said that at that time, AAA Insurance faced a series of difficulties, with revenue in 2022 reaching only 196 billion VND, the compensation process still had many limitations and customer service was not optimized.

After the takeover, Bamboo Capital implemented a comprehensive restructuring strategy such as renewing the image, message and communication strategy to attract customers. Designing new insurance products to suit market needs; improving customer care processes and compensation processes "fast - correct - sufficient".

M&A is not about "big fish swallowing small fish" or acquisition, but about keeping the fire burning to together establish a foundation for long-term development.

“After only 3 years, AAA Insurance has dramatically transformed, from 27th/32nd place in the non-life insurance industry, to the Top 15 best non-life insurance companies in Vietnam. Revenue in 2024 is expected to reach 1,500 billion VND, nearly 8 times higher than before Bamboo Capital took over,” Mr. Lam informed.

Speaking more about the post-M&A synergy value, Ms. Luu Thi Thanh Mau, Vice President of the Vietnam Young Entrepreneurs Association and General Director of Phuc Khang Investment and Construction Joint Stock Company, said that when entering into joint ventures or cooperation with foreign investors, one must aim for long-term and sustainability. That is a smart choice.

6-7 years ago, Phuc Khang promoted investment cooperation with Mitsubishi Corporation of Japan and successfully invested in the Diamond Lotus Riverside Project (District 8, Ho Chi Minh City) with 800 international green standard apartments.

“After 5 years, we had our first child, a green real estate project. With a safe and sustainable business philosophy, we met a partner, Mitsubishi, who shares the same philosophy,” Ms. Mau shared.

According to this businessman, Japanese investors are difficult, but once you become their partner, your business will benefit a lot and grow a lot.

As for Coteccons - a "giant" in the construction industry, in 2024, it completed the transaction procedures to acquire 100% of the capital contributions of two enterprises, Sinh Nam Metal Company Limited (Vietnam) and UG Vietnam Mechanical and Electrical Company Limited (UG M&E). Ms. Nguyen Tran Thuc Anh, Investment Director of Covestcons (a member company of Coteccons) said: "Both of these companies are long-term partners of Convestcons. During their operation, they have both created a certain legacy and have been recognized by their partners."

According to Ms. Thuc Anh, the negotiation is complete, but the deal has not been closed. The value the company wants to build is a long road after the transaction. Therefore, the company takes advantage of the internal strengths of the parties to create value for each other and create value for society.

“Our approach is not simply M&A like big fish swallowing small fish or acquisition, we follow the motto 'Keep the fire burning' - meaning keeping the fire burning to together establish a foundation for long-term development", Ms. Thuc Anh added.

Strategies for Successful M&A Deals

Decoding successful strategies in M&A deals, Ms. Luu Thi Thanh Mau concluded that there are 3 things that need to be managed.

Firstly, it is necessary to manage the target before working with foreign investors. When working with foreign countries, it is necessary to prepare and do well in terms of labor discipline, transparency, money is the last issue, then the benefits will come later.

Second, how to manage change. When Phuc Khang worked with Mitsubishi - a 9-year-old company with a 130-year-old company, they sent an email at 2 a.m. on the second day of Tet, so the company had to work on the second day of Tet for the cooperation to be successful.

Third, it is necessary to manage goals, standards, and development models. Instead of waiting domestically, businesses need to proactively seek out the resources they lack and find leverage to help them grow stronger like foreign businesses.

From her business experience, Ms. Mau learned a lesson: to be successful in M&A, do it with pure motivation and with all your heart, even if the profit may be low.

Mr. Angus Liew, Chairman of the Board of Members of Gamuda Land Vietnam Company, commented that all M&A deals are valuable lessons. Gamuda Land has participated in 6 acquisitions and 6 sales, from which it has gained many important experiences.

To successfully implement M&A, Mr. Angus Liew emphasized 3 main factors. First is to expect unpredictable factors. Because the negotiation process in M&A always has many unpredictable factors.

Therefore, it is necessary to have a backup plan (plan B) to deal with unexpected risks. Anticipating and preparing carefully will help minimize the impact of unwanted situations.

Next is choosing a reputable consulting firm. According to Mr. Liew, choosing a consulting firm is a vital factor in M&A. A strong and experienced consulting firm will help speed up the process and overcome complex regulations. Mistakes in choosing a consultant can lead to the failure of the entire deal.

Finally, flexibility and patience, because M&A is never a straight path. To be successful, parties must be flexible and support each other throughout the process. It may take time, but patience is key. If you want to go fast, you have to go slow.

Ms. Binh Le, General Director, Head of M&A Department, ASART Business Consulting Company, stated that a consultant does not only stop at connecting, but also understands the strategic vision of each party, how the two parties come together, how to give a common direction... that leads to the post-deal, leading to the decisive decision.

“For important deals of a certain scale, even investors require businesses to have consultants, because they do not want to participate in a game and have to instruct the other side how to play. Anticipating many risky issues will show that consulting is important,” Ms. Binh Le emphasized.

Source: https://baodautu.vn/kien-tao-gia-tri-hau-ma-d231463.html