Việt – Campuchia

RoK keen on M&A deals on consumer goods, food, beverages, and retail sectors

Thứ Ba, 12/10/2021| 10:54

The Vietnamese consumer goods, food, beverage, and retail sectors are projected to attract investors from the Republic of Korea (RoK) through mergers and acquisitions (M&A) channels in the near future, according to industry insiders.

During a recent online event "M&A Vietnam – Republic of Korea 2021", Andrew D. Kim, manager of the Global M&A Center at the Korea Trade-Investment Promotion Agency (KOTRA), revealed that RoK companies, especially small and medium-sized enterprises (SMEs), have shown a keen interest in the Vietnamese M&A market. 

He added that despite the RoK’s FDI inflows into the nation plunged by 40.7% due to the COVID-19 pandemic, RoK enterprises have drawn up several plans for the post-pandemic period.

Along with fields such as consumer goods, food, beverage, and retail, RoK investors have been active in other sectors, including real estate, agriculture, pharmaceuticals, healthcare, telecommunications, technology, and banking-finance.

Most notably, RoK enterprises tend to acquire the majority of shares in Vietnamese firms with the rate of equity investment increasing from 78% in 2019 to 95% in 2020.

According to statistics released by MergerMarket, the RoK investors have carried out 69 M&A deals with a total value of US$5.1 billion in the Vietnamese market from 2005 to 2021.

Son Won-sik, director of Vietnam Korean Services Group at Deloitte Vietnam, has advised foreign investors to pay close attention to factors such as quality of profit, net debt, and cash flow of businesses when conducting M&A activities, especially amid the complicated nature of COVID-19 pandemic.

According to experts, investors should also choose an experienced consultant capable of providing sufficient service and expertise in the Vietnamese market as a means of successfully implement M&A deals moving into the 'new normal' situation.

Le Song Lai, deputy general director of State Capital Investment Corporation (SCIC), revealed that foreign investors who want to acquire equities from SCIC are not required to go through special review procedures.

This move is anticipated to create favorable conditions for RoK investors when conducting M&A activities in the nation.

Figures from the Ministry of Planning and Investment have indicated that the RoK remains the second largest foreign investor in the Vietnamese market with a total FDI capital reaching approximately US$3.6 billion during the opening eight months of the year.