M&A activities gather pace in Vietnam: report
M&A activities gather pace in Vietnam: report
The Vietnam Competition Authority's 2014 Annual Report says that mergers and acquisitions (M&A) have gathered pace in most industries.
In 2009-11 there were around 750 M&A transactions totally worth US$6.89 billion.
This rose to US$11.13 billion in 2012-14.
The average value of each transaction has also been rising concurrently, for instance going up from US$10 million in 2012 to US$15 million in 2013.
Significantly, mergers and acquisitions have been taking place in a range of industries, with finance and banking, consumer goods, retail, and energy heading the list.
Last year the retail sector topped with well over a third of the value of transactions even as domestic businesses accounted for 74% of all transactions.
It was followed by consumer goods that accounted for 21%, followed by the energy industry with 18%.
Analysts attribute the M&A boom to the Government's strong push for restructuring in recent years, especially of the financial sector.
Many transactions in the finance and banking industries have been completed in double quick time to eliminate small and weak banks and create new stronger banks in line with the Government's target of having only 15 to 17 lenders instead of the current 40.
The housing sector's prolonged slump has also encouraged a slew of transactions and the entry of many new investors into the market.
But the sharp increase in the number of transactions has analysts worried. They fear the possibility of some firms abusing their dominant market position and creating unhealthy competition.
It is to preclude such a threat that the Government issued Decree No 71 last year warning against violation of anti-trust regulations.
It provides for penalties of up to 10% of turnover for any enterprise that flouts anti-trust regulations, up from the earlier 5%.
Nevertheless, the analysts want the Government to keep a close eye on M&A transactions to prevent any actions that will affect market competition.
