M&A market in 2025 is forecasted to be very promising

Vietnam's M&A market is facing a period of readiness to receive large investment deals and is expected to strongly attract FDI capital by 2025.

Many hundred million dollar deals in 2024

Share at Forum GHOST The 16th Vietnam took place recently in Ho Chi Minh City, Mr. Nguyen Cong Ai - Deputy General Director of KPMG Vietnam, said according to a summary from KPMG M&A market Vietnam's real estate market, the first three quarters of 2024 still reached a total transaction value of 3.2 billion USD, with more than 220 deals, an increase of 46% over the same period in 2023.

Domestic investors play a major role in Vietnam's M&A market, accounting for 53% of total transaction value from the beginning of 2024

In 2024, there is a tendency for M&A deals to be not foreign investors buying domestic companies, but domestic companies buying each other. Due to more protectionist policies in countries, money is reluctant to flow abroad when interest rates are high.

Since the beginning of the year, domestic investors have played a major role in Vietnam's M&A market, accounting for 53% of the total announced transaction value, nearly double the total contribution of the four largest foreign investors combined.

"This is the result of the business restructuring process of domestic enterprises. This trend also shows that foreign investors are approaching the M&A market in Vietnam more cautiously," Mr. Ai commented.

In terms of structure, M&A transactions in the first 9 months of 2024 mainly took place in the real estate sector (accounting for 53%), consumer staples (14%), and industry (21%). These three sectors accounted for a total of 88% of transaction value and were among the largest M&A deals. M&A transactions worth 40-112 million USD also took place in the industrial and information technology sectors.

Bustling 2025

Also at this Forum, Deputy Minister of Planning and Investment Nguyen Duc Tam commented that M&A has become an effective capital mobilization channel, contributing to diversifying investment attraction activities for the Vietnamese economy.

Deputy Minister of Planning and Investment Nguyen Duc Tam commented that M&A has become an effective capital mobilization channel, contributing to diversifying investment attraction activities.

"The Vietnamese M&A market has always been assessed by foreign investors as a safe, attractive, and potential market, a place where they can place their trust in growth potential as well as investment opportunities.

High-tech industries such as semiconductors, artificial intelligence (AI) and renewable energy are emerging as strategic sectors that Vietnam is targeting to attract investment. These are industries with the potential to not only help promote economic growth but also create a strong transformation for the economy towards modernity and sustainability," said the Deputy Minister of Planning and Investment.

The National Assembly has just approved the socio-economic development plan for 2025, the final year of the 2021-2025 term, which is identified as a breakthrough year to reach the finish line, creating the premise to bring the Vietnamese economy into a new era, the era of national development. One of the important goals for 2025 is GDP growth of 6.5-7%, striving to reach 7-7.5%.

To achieve this goal, the National Assembly has proposed 12 groups of tasks and solutions for the 2025 Socio-Economic Development Plan, including drastic institutional removal and overcoming bottlenecks.

“When the proposed solutions are implemented drastically and effectively, the Vietnamese economy can make a breakthrough and accelerate to reach the finish line in 2025. This will be an important foundation for us to continue to attract foreign investment in general, and investment through M&A in particular,” Deputy Minister Nguyen Duc Tam emphasized.

On the side of the Ministry of Planning and Investment, the Deputy Minister said that the Ministry is actively researching and proposing solutions to improve policies and create a favorable environment for M&A deals. One of the important initiatives is the issuance of new decrees related to investment support funds, support for high-tech enterprises and research and development (R&D) projects, along with special investment mechanisms for projects in the fields of semiconductors and renewable energy.

Mr. Le Trong Minh - Editor-in-Chief of Investment Newspaper, commented: "Vietnam's M&A market is driven by a solid macroeconomic foundation, many strategic reforms and the Government's vision of comprehensive digital transformation. Sustainable GDP growth, effective inflation control and a rapidly emerging middle class have turned Vietnam into an attractive investment destination."

In 2025, a more positive turn is expected, with previously stalled transactions likely to return. They are driven by investors’ confidence in Vietnam’s stable economic outlook and more proactive, far-reaching policies from the Government.

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