Energy and tech lead new M&A thrust

Energy and tech lead new M&A thrust

Vietnam is beginning to witness a recovery in its dealmaking landscape in light of investors’ growing appetite for opportunities in the market.

Vietnam is pushing for investment in semiconductors, but some deals have yet to be completed, Photo: Shutterstock

In mid-February, Norway’s Scatec closed the sale of a 39-MW Dam Nai wind farm and the associated operating company in Vietnam to Sustainable Asia Renewable Assets, a utility-scale renewable energy platform of the Switzerland-based SUSI Asia Energy Transition Fund. The deal paves the way for the fund to expand further.

Also in early February, Japanese trading house Marubeni invested in aluminium-recycling firm Nguyet Minh 2 Trading-Services-Environment. By expanding its business through this investment, Marubeni aims to ensure a stable medium- to long-term supply of recycled aluminium ingots with low environmental impact, and contribute to a sustainable society in Vietnam.

Elsewhere, Singapore’s sovereign wealth fund GIC has poured an additional sum of $135 million into Vietnam-based paediatric and maternity clinic chain operator Nhi Dong 315 early this month. Meanwhile, British energy company EnQuest inked a deal to acquire Harbor Energy’s business in Vietnam in January, which comprises a 53.1 per cent equity interest in the Chim Sao and Dua production fields.

According to the latest data by the Ministry of Investment and Planning, merger and acquisition (M&A) activities remain robust. In January, there were 260 cases of capital contributions and share purchases by foreign investors with a value of $322.9 million, up 70.4 per cent against the same period last year.

Eric Johnson, partner at Freshfields, said within the Asia-Pacific region, Southeast Asia and Vietnam in particular will remain a focus area for many of its clients.

“On the positive side, Vietnam’s impressive economic growth in 2024 will continue to drive interest in the market for investors looking to invest in businesses that provide goods and services to Vietnam’s growing middle class in sectors like healthcare, education, and financial services. Besides that, continued supply chain shifts have driven and should continue to drive investment into sectors like industrial real estate and other supply chain infrastructure such as shipping and aviation,” Johnson said.

In addition to that, Vietnam’s recent push for increased investment in semiconductors and data centres have been met with increased investor interest, though not a lot of closed deals yet.

“Key issues for investors in both of these sectors are questions around the sufficiency of the power grid to supply these energy-intensive businesses, regulatory uncertainty, especially around data centres, and the availability of the types of skilled workers these industries require, especially for the semiconductor industry,” Johnson added.

Ong Tiong Hooi, who is the partner and transaction services leader of PwC Vietnam, said the global M&A landscape is set for a significant recovery, driven by easing economic headwinds and strategic acquisitions.

“This trend is mirrored in Vietnam, where we see increased activity across various sectors. In Vietnam, domestic companies are leading high-value transactions, and foreign investors are showing renewed interest, particularly in the healthcare and education sectors. Navigating this dynamic market requires a deep understanding of industry trends and a strategic focus on value creation. Dealmakers must stay vigilant, monitoring valuations, interest rates, and geopolitical factors to seize emerging opportunities,” Hooi said.

According to a report on global M&A industry trends released by PwC last week, the healthcare landscape in Vietnam in 2025 is expected to be vibrant, driven by increasing demand for high-quality healthcare services and a rapidly expanding middle class. Private hospitals and speciality clinics, such as ophthalmology and oncology centres, will be primary drivers of M&A activity.

Meanwhile, the education sector will be dynamic, driven by government encouragement of foreign investment and growing demand for private education. Strategic partnerships and investments in higher education and vocational training will enhance quality and infrastructure. Supportive government policies will create a favourable environment for both local and foreign investors, presenting numerous opportunities for M&A activities.

VIR