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Big M&A affairs expected in second half of 2012   2012-07-14 - TBKTSG

Experts believe that the merger and acquisition (M&A) market would see a boom in the second half of 2012 and in 2013, when a lot of big deals would be wrapped up.


A survey by Stoxplus, a finance data and communication in Vietnam, showed that the investors from China, Russia and India tend to hold controlling stakes in Vietnamese enterprises. Meanwhile, Japanese investors, who initially held modest volumes of shares, have been trying to gradually increase their ownership ratios.

Of the total M&A value of 6.3 billion dollars in 2011, about 2 billion dollars were spent by investors on small deals to acquire small percentages of shares, while 4 billion dollars spent on big deals to obtain controlling stake proportions.

The tendency of foreign investors buying big share proportions is the main differential characteristic of the M&A deals in 2011 in comparison the years before.

Most of the deals had the trading values less than five million dollars. However, surveyors have noted that the number of big affairs with the value of over 30 million dollars has been on the rise, accounting for 25 percent of the total affairs.

Nine deals were reportedly made with the value of over 100 million dollars for each.

The survey was conducted by Stoxplux during 15 months, from January 2011 to the end of March 2012, showed the figures quite different from the others in other official reports.

According to Stoxplus, the total value of the M&A deals in Vietnam reached 6.3 billion dollars, which is much higher than the figure of 4.7 billion dollars released at the Vietnam M&A forum 2012. The figure is 3.7 times higher than the transaction value in 2010, which was 1.8 billion dollars only.

The survey has also pointed out that the total M&A value in the first quarter of 2012 was 2 billion dollars, higher than the 1.5 billion dollars announced at the above said forum.

In 2011, Japanese investors were the biggest buyers who spent 941 million dollars on Vietnamese shares. However, the investors from China have “created a new wave” on the market with a lot of big deals made recently.

With just five successful deals, Chinese investors have jumped to the second position in the list of biggest investors with the total investment value of up to 723 million dollars. The US, South Korea, Russia, India and Germany are the followers.

Experts have said that even though Vietnam still has not had a perfect legal framework on M&A activities, the M&A market still has been very bustling and would continue its growth tendency.

Hoang Manh Thang, a senior executive of Earnst & Young, believes that there would be more big deals to be made in 2012 and 2013.

Previously, investors usually bought 5-15 percent of stake proportions of Vietnamese enterprises, which did not allow them to join the management and obtain the expected targets.

In order to obtain the right to control businesses, they need to be the big shareholders. Meanwhile, the investors believed that it’s now the right time for them to buy more shares, when the stock market is gloomy, thus allowing them buying shares at low prices.

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