Hanoi (VNA) - Many large and unexpected merger andacquisition (M&A) deals were made in 2016, with retail and real estatecontinuing to dominate the domestic market.

Accordingto the Vietnam M&A Forum research group, M&A value in 2016 broke therecord of 5.2 billion USD set in the previous year.

Adeal that attracted much public attention since late 2016 was the purchase of78.38 million shares of the Vietnam Dairy Products Joint Stock Company(Vinamilk) through the stock market. The buyer is Singaporean food and beveragefirm Fraser & Neave (F&N), owned by Thai billionaire CharoenSirivadhanabhakdi.

F&Npaid 11.3 trillion VND (over 500 million USD),raising its ownership in Vinamilk from 11 percent to 16.4 percent.

Inthe third quarter, the Thai tycoon’s TCC Group also completed its purchase ofthe entire wholesale network of Metro Cash & Carry Vietnam, including 19centres and relevant real estate valued at 848 million VND.

CentralGroup, another Thai firm, also spent 1.14 billion USD on acquiringall 32 supermarkets and trade centres of Big C Vietnam from France’s CasinoGroup.

Anotherlarge M&A deal in 2016 was Thai group Singha becoming a strategic partnerof Masan Group by buying 25 percent and 33 percent stake in Masan ConsumerHoldings and Masan Brewery, respectively, at 1.1 billion USD.

Thepurchase of Maximark by Vingroup, one of the local most dynamic,well-capitalised companies in Vietnam, for anundisclosed value, was also considered a significant deal, an example of theflourishing M&As in the retail and consumer goods sectors.

DangXuan Minh, head of a research group of the annual Vietnam M&AForum (MAF), said retail and consumer goods M&A targeted at entering andexpanding the market was the most noteworthy trend in 2016.

Theincreasing entry of foreign retailers into Vietnam’s marketand the opening of foreign-owned retail outlets through M&As, especially byThai companies, in the last three years have turned the retail sector into aprime example in the local M&A market, he noted.

Thatfact was attributed to the modest proportion (less than 30 percent) of modernretail channels, such as supermarkets, hypermarkets, shopping centres andconvenience stores in Vietnam’s retail market, promotingthis market’s attractiveness to foreign investors.

Tariffson many goods will be removed as part of commitments in the ASEAN EconomicCommunity with a population of over 600 million. Meanwhile, the maturity ofThailand’s domestic retail industry also encouraged this country’s retailers toexpand overseas business, particularly in countries such as Vietnam, which hasan almost 100-million-strong population, Minh added.

Evenwithout multi-billion dollar deals, real estate was still hot in the M&Amarket in 2016, with the participation of investors from theRepublic of Korea, Japan and Singapore.

Notably,Korean Mirae Asset cooperated with AON BGN to spend 382 million USD on buying Keangnam Landmark 72 in Hanoi.

MapletreeInvestments, a Singaporean firm, said it had acquired Kumho Asiana Plazaproject in District 1, HCM City, at a cost of 215 million USD through the joint venture between Kumho Industrial and Asiana Airlines.

NewLife RE also purchased Duxton Hotel in District 1 at 49.2 million USD from Low Keng Huat.

Domesticenterprises were also busy with property M&As in 2016.
TNRHoldings invested 110 million USD to buy TNR Tower Hanoi from Vingroup. Vietnam’sMuong Thanh Group, meanwhile, said it now owns 95 percent of shares at Cienco 5Land after spending 1.5 trillion VND on the purchase.

Vietnamese Rang Dong Group also acquired a five-star resort complex in Binh Thuanprovince.

According to Stephen Wyatt, country head for Vietnam of global real estateadvisor JLL, many foreign investment funds told JLL they want to increase theirpresence in Vietnam through investment cooperation or by buying existingprojects, particularly profitable ones.

Chris Freund, CEO of the private equity firm Mekong Capital, believed M&Aswill continue actively in all fields, especially real estate, agriculture,consumer goods, retail and pharmaceuticals. All foreign clients Mekong Capitalhas met are interested in these areas, he said.

Sharing a similar view, Alex Crane, general manager at Cushman & WakefieldVietnam, forecast retail M&As will continue booming in 2017, elaboratingthat many foreign businesses have yet to enter Vietnam’s retail market due tothe high office rentals. Therefore, the best solution is M&A, usually byforming a joint venture with a Vietnamese enterprise.

Minh, however, pointed out an array of challenges for M&A activities in2017, including changes in US policies, the uncertain future of TPP andobstacles to the equitisation of State-owned enterprises.

Tohave an M&A value comparable with last year, the State must make strongmoves to divest its stake in large groups and corporations, he said.-VNA