Japanese companies accelerate investment interest in Vietnam

Japanese companies accelerate investment interest in Vietnam

Despite the decline in transaction value in 2024, the number of deals between Japanese and Vietnamese enterprises still recorded a slight increase, showing that Japanese investors’ interest in the Vietnamese market remains strong.

According to the latest report published at the Vietnam Mergers and Acquisitions Forum 2024, the total value of Japanese merger and acquisition (M&A) deals in Vietnam in 2024 reached $167 million, a sharp decrease compared to $1.55 billion in the previous year.

Phi Hoa, founder and CEO ONE-VALUE

However, the number of transactions increased to 21 deals, showing that despite the lack of blockbuster deals, Japanese enterprises still maintain their expansion strategy into Vietnam through small and medium-sized deals.

This clearly reflects that Japan’s interest in the Vietnamese market remains substantial, despite global uncertainties such as geopolitical tensions and tariff risks. Healthcare services and medical support, along with high technology, semiconductors, retail, and energy, are emerging as focal points of this investment wave.

For example, the deal in which Elan acquired 51 per cent of TMC Vietnam, in which we provided end-to-end advisory services, serves as clear evidence of the shift in Japanese investment strategy. No longer focusing solely on manufacturing, finance, and retail, Japanese enterprises are making a strong move into healthcare services and medical supply chains - a sector with immense growth potential in Vietnam over the next decade.

The success of this deal could set a precedent for a wave of future M&A transactions, paving the way for deeper collaboration between businesses from both countries. Vietnam is gradually solidifying its position as one of the most important strategic markets for Japanese enterprises in Southeast Asia, and this is only the beginning of a new investment wave.

The Vietnamese market boasts a high growth rate, a young population, and a rapidly expanding healthcare system. Elan’s decision to make Vietnam the first destination in its Southeast Asia expansion strategy is no coincidence. The company recognises the long-term potential of medical support services, especially amid the strong growth of private hospitals.

Moreover, acquiring TMC not only enables Elan to accelerate market entry but also allows it to leverage an existing customer network to swiftly roll out its Care Support Set - its flagship product.

This year, the fundamental factors sustaining Japan’s investment wave into Vietnam remain unchanged. While 2024 witnessed the rise of mid-sized and small-scale M&A transactions, 2025 is expected to mark a significant transformation, with Japanese conglomerates making bold moves in technology, financial services, and healthcare.

The ongoing shift of capital away from China continues to drive the expansion of supply chains into Southeast Asia, with Vietnam emerging as a top destination. Japanese enterprises are increasingly focusing on high technology, AI, semiconductors, and research and development, aiming not only to leverage Vietnam’s skilled workforce but also to expand their influence within the global value chain.

Interest in the semiconductor industry is also rising sharply, particularly as Vietnam implements structured investment policies to attract capital into this sector.

At the same time, healthcare services and pharmaceuticals are emerging as a strategic investment sector. Vietnam is in the early stages of upgrading its healthcare infrastructure, with a strong demand for modern equipment, premium healthcare services, and private hospitals. This presents a golden opportunity for Japanese corporations to establish their presence not only through direct investment but also through M&A transactions, enabling rapid market entry.

Beyond healthcare, consumer finance, digital banking, and fintech are also gaining traction among Japanese investors. The rapid growth of e-commerce and personal finance demand is creating opportunities for Japanese conglomerates to expand operations through M&As.

Another noteworthy trend is the growing proactivity of Vietnamese enterprises. In addition to being a prime destination for Japanese capital, Vietnamese businesses are expected to seek investment opportunities in Japan through reverse M&A transactions. Companies specialising in technology, financial services, or food supply chains could emerge as key players in the Japanese market in the near future.

Vietnam is entering a crucial phase in its integration and foreign investment attraction. M&As are not only a tool for Japanese businesses to expand their market share, but also an opportunity for Vietnamese enterprises to elevate their position and integrate into the global value chain. The investment wave from Japan in 2025 will continue and expand with highly strategic transactions, laying the foundation for a sustainable partnership between the two economies.

VIR