Data from the Foreign Investment Agency (Ministry of Planning and Investment) shows that by the end of 2022, US businesses had invested in 1,216 projects in Vietnam, with a total investment capital of 11.4 billion USD. The United States ranked 11th among the countries and territories investing the most in Vietnam.
Billions of dollars in real estate and tourism businesses
Warburg Pincus is no longer a strange name to Vietnamese investors. This is the US investment fund that Prime Minister Pham Minh Chinh worked with during his visit to the US in May 2022.
Warburg Pincus is known as a fund specializing in making investment deals of several hundred million USD each time. The total investment value is billions of USD in a series of leading enterprises in Vietnam.
It is one of the oldest and largest private equity funds globally, headquartered in New York. Vietnam is Warburg Pincus' third largest investment destination in Asia, after China and India.
In June 2022, a consortium of investment funds led by Warburg Pincus completed a $250 million deal in Novaland. This investment affirms Warburg Pincus' long-term investment strategy in Vietnam as the largest private equity fund with more than $1.5 billion disbursed and extends the portfolio of leading businesses in Vietnam that Warburg Pincus has been accompanying.
This is a significant amount of money to help Novaland expand its strategic land fund and complete the development of key projects in progress.
The transaction with Novaland marks Warburg Pincus' sixth investment in Vietnam.
Warburg Pincus' first major deal in Vietnam took place in 2013 when the group invested 200 million USD to buy 20% of Vincom Retail (VRE) shares from billionaire Pham Nhat Vuong.
Warburg Pincus then invested $300 million with VinaCapital in 2016. Warburg Pincus and VinaCapital reached an agreement to establish a joint venture specializing in hotel investment and management in Vietnam and will gradually expand to the Southeast Asia region.
The joint venture has since made investments, including the purchase of 100% of the shares of hotel management company Serenity Holding, which manages the brands Fusion Resorts, Fusion Suites, Alma Resorts, and À La Carte Living.
This joint venture also bought 50% of the shares of Metropole Hanoi Hotel and 100% of the capital of Ho Tram Project Company - the owner of The Grand Ho Tram project in Ba Ria Vung Tau. At the same time, the joint venture with Becamex IDC developed industrial real estate with capital up to hundreds of millions of USD.
In mid-2020, a group of foreign investors led by US investment fund management company KKR and Singapore's Temasek spent VND15,100 billion (equivalent to USD650 million) to buy over 200 million shares (6% of charter capital) of Vinhomes - the real estate management unit of Vingroup Corporation. After the transaction, this group became a major shareholder of Vinhomes.
In early 2018, Warburg Pincus announced an investment of more than 370 million USD (equivalent to about 8,400 billion VND) from two independent legal investors managed by this group in Techcombank of billionaire Ho Hung Anh.
The fund then went on to invest in MoMo, a fintech platform, through two undisclosed Series C and Series D funding rounds. MoMo recently confirmed its value at over $2 billion, making it one of Vietnam’s tech unicorns.
In the capital injection into Novaland, Mr. Jeffrey Perlman, Managing Director - Head of Real Estate Asia Pacific at Warburg Pincus said, Warburg Pincus strongly believes in the long-term growth trajectory of the Vietnamese economy and continues to actively pursue new opportunities to invest in leading platforms in Vietnam.
With the investment in Techcombank, Warburg Pincus representatives also expect long-term growth in Vietnam. Accordingly, Vietnam is one of the countries with the fastest growing banking market in Southeast Asia.
Warburg Pincus expects many Vietnamese businesses to become leading corporations in the region.
Investing in technology and retail
The American investment fund management company KKR was also present very early in Vietnam. This is one of the largest investment companies in the world with a total asset value of up to 370 billion USD.
KKR became a major shareholder of Masan Consumer - a subsidiary of billionaire Nguyen Dang Quang's Masan Group - in 2011 with an initial investment of $159 million. In 2013, KKR continued to invest another $200 million, increasing its ownership to 18.04%. In 2017, the fund invested another $250 million in Masan Group and Masan Nutri-Science (now renamed Masan MEATLife).
In mid-2021, according to DealStreetAsia, KKR Group invested about 100 million USD in Vietnam's EQuest Education Organization.
In the technology sector, Mr. Truong Gia Binh's FPT Corporation in 2017 had an investment cooperation agreement with strategic investor Synnex Technology International Corporation (Synnex) - the world's third largest corporation in distributing technology products, telecommunications and electronic components headquartered in California, USA.
In mid-2015, the American giant Mondelēz International spent nearly VND8,000 billion to buy 80% of the confectionery shares of Kinh Do Group (KDC). Mondelēz International is known as the world's leading snack food group with 2015 revenue of nearly USD30 billion and more than 107,000 employees worldwide.
Regarding FDI, in recent years, US investment in Vietnam has continued to increase. In 2022, the US invested about 748 million USD in Vietnam, with 91 newly licensed projects. To date, US investment in Vietnam has reached more than 11 billion USD. The US currently ranks 11th in the list of countries investing the most in Vietnam.
In late March 2023, an unprecedented large American business delegation visited Vietnam.
A total of 52 representatives from US companies and corporations, including defense, pharmaceutical, and technology companies, were present in Vietnam (such as Boeing, Bell, UPS, Coca Cola, etc.) to discuss investment and business opportunities under the annual program organized by USABC. The event coincided with the 10th anniversary of the Comprehensive Partnership between the US and Vietnam.
Many familiar corporations are operating or manufacturing in Vietnam and have expansion plans such as Apple, Coca-Cola and PepsiCo, Netflix... SpaceX is also looking for satellite Internet service markets in Vietnam and other countries in the region.
Pfizer and Johnson & Johnson, medical device manufacturer Abbott, Visa Financial Company, Citibank, cloud computing technology companies Meta and Amazon Web Services are stepping up their search for business opportunities in Vietnam.
Recently, some US businesses have also shown interest in Vietnam's energy market. In March 2023, a representative of the leading US energy corporation AES said that energy continues to be an important strategic area in the cooperative relationship between the US and Vietnam. Progress in large-scale energy projects by AES and other member companies will contribute to promoting Vietnam's development.
Previously, at the end of 2020, an American corporation - GE proposed to Lang Son province to agree to allow research and survey of the Chi Lang Wind Power Plant project with a total expected capacity of 165 MW and the Ai Quoc Wind Power Plant project with a total expected capacity of 253 MW with a total investment of more than 710 million USD.
Assessing the Vietnam-US economic relationship in the coming time, Mr. Vicente Nguyen, Chief Investment Officer (CIO) of AFC Vietnam Fund, said that the official visit of US President Joe Biden to Vietnam on September 10 at the invitation of General Secretary Nguyen Nguyen Phu Trong is a very positive signal and could be a good stepping stone for the Vietnamese economy in the next 10 years. "Previously, the signing of a comprehensive partnership with the US during President Barack Obama's official visit to Vietnam opened up great opportunities afterwards. With many factors combined with the impact of this agreement, Vietnam's economy accelerated and achieved many successes in the past 10 years," Mr. Vicente Nguyen recalled. |
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