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Top 10 most outstanding M&A deals in the period of 2021 – 2023

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In recent years, the M&A (Mergers and Acquisitions) market in Vietnam has become an attractive destination for international and domestic investors. During the period 2021 – 2023, Vietnam recorded a lot of M&A deals, but the most notable ones are the following deals: 

 

1. UOB Bank acquires Citigroup’s entire retail banking business  

  • Value: $3.65 billion (rate: 100%) 
  • Industry: Banking 
  • Year: 2022 

Citibank and UOB announced the acquisition in January 2022 with an agreement to transfer their retail banking businesses in four markets of Malaysia, Thailand, Vietnam and Indonesia. 

By the end of March 2023, UOB had completed the acquisition of Citigroup’s consumer banking in Malaysia, Thailand and Vietnam, increasing the number of customers in Southeast Asia to 7 million. The figure is expected to reach 8 million customers after UOB continues to complete Citigroup’s Indonesian transfer deal by the end of this year. 

This deal had a positive impact on UOB’s business results, as the bank net profit in the first quarter of 2023 was US $1.1 billion, which is 67% up over the same period in 2022. The profit before tax and interest from consumer banking franchises doubled to S $795 billion (US $596 billion), mostly from the markets of Singapore, Malaysia and Thailand. 

 

2. Warburg Pincus invested $250 million in Novaland  

  • Value: $250 million  
  • Industry: Real Estate 
  • Year: 2022 

On June 1, 2022, No Va Land Investment Group Corporation (Novaland), one of the companies with the largest market capitalization listed on the Ho Chi Minh Stock Exchange (HOSE), has just received a US $250 million investment from Warburg Pincus, a leading global private equity firm focused on growth investing. 

Through this partnership, Novaland’s current solid position in the real estate sector will be strengthened by Warburg Pincus’s experience and expertise in the global real estate market. 

This deal is also positive signal showing the trust of international financial institutions in Novaland along with the focus on investment and development of urban real estate and tourism real estate in the mid-end and high-end segment. The $250-million investment will be allocated to increase the land fund and develop current Novaland projects in strategic locations, take advantage of infrastructure in the South. 

In addition, this transaction marks the sixth Warburg Pincus’s investment in Vietnam. Since 2013, Warburg Pincus has invested more than US $1.5 billion in some of Vietnam’s leading enterprises, including Vincom Retail, BW Industrial Development, Lodgis Hospitality, Techcombank, etc. Warburg Pincus strongly believes in the long-term growth trajectory of Vietnam economy and might continue to pursue new investment opportunities in leading platforms in this country. 

 

3. Sumitomo Mitsui Financial Group Corporation (Japan) acquires 15% stake of VPBank 

  • Value: approximately $1.35 billion (15%) 
  • Industry: Banking 
  • Year: 2023 

On March 27, 2023, Vietnam Prosperity Bank (VPBank) announced that it had reached an agreement to sell a 15% stake to Sumitomo Mitsui Banking Corporation (SMBC) – a member of Sumitomo Mitsui Financial Group (SMFG) of Japan. This agreement officially made SMBC Group become a strategic investor of VPBank.  

Previously, in May 2022, the two Parties signed a Business Cooperation Agreement. At the end of 2021, SMBC Consumer Finance Company – a subsidiary of SMFG – also bought 49% of FE Credit – a subsidiary of VPBank. SMBC also helped VPBank arrange many successful fundraisings from international markets. 

So far, this is the highest-value deal in the financial sector in Vietnam. The investment from SMBC is expected to raise VPBank’s total equity from VND 103,500 billion to approximately VND 140,000 billion, which ranks second in the Banking industry, after Vietcombank.  

With this strategic investment of SMBC, VPBank will become the second largest bank in Vietnam.  VPBank is allowed to have sufficient financial capacity to serve several corporates that have large quantities of customers, especially FDI enterprises and multinational corporations that have intention of investing in Vietnam. 

 

4. The Sherpa Limited Company (belongs to Masan Group) acquired 85% of Phuc Long 

  • Value: $280 million 
  • Industry: Consumer Goods 
  • Year: 2022 

On May 21, 2022, The Sherpa Limited Company, a member of Masan Group JSC, announced the signing of an agreement to acquire 20% of Phuc Long Heritage JSC – the company owns Phuc Long brand – one of the leading tea and coffee chain brands in Vietnam. Masan then poured capital twice to increase its ownership to 51% and 85% respectively; Phuc Long beverage chain officially belonged to Masan with a valuation of more than $450 million – announced in August 2022. 

According to Danny Le, General Director of Masan Group JSC, it is necessary to approach the commercial retail sector if the company aims to serve consumers directly, but building from scratch can take 5-7 years with uncertainty of success. Therefore, the best strategy is M&A, which we will invest on a large scale to compete with foreign chains. Moreover, he shared the reason for acquiring Phuc Long chain. “In Masan, we often look for strong brands in the market. That’s why Masan invested in Phuc Long, a strong local brand. We think that we can bring the Vietnamese brand to the world with Phuc Long.” 

Masan BODs expect Phuc Long to make contributions to revenue growth by cross-selling, upselling through convenient solutions and integrating customer service platforms. 

After the deal, the business has achieved promising results. In the first 9 months of 2022, Phuc Long chain contributed VND 1,143 billion in revenue to the total revenue of the whole corporation. In particular, profit before tax, interest and depreciation (EBITDA) of Phuc Long reached VND 199 billion.  

 

5. De Heus Group (Netherlands) acquires the entire animal feed business of Masan Group 

  • Value: $600 -700 million (rate 100%) 
  • Industry: Animal Feed 
  • Year: 2021 

According to the MOU signed between De Heus Vietnam and Masan on September 14, 2021, De Heus Vietnam officially acquired 100% of MNS Feed production in December 2021. At the present, MNS Feed Co., Ltd. owns 13 feed mills and 1 premix plant, of which 6 factories belong to Proconco, 7 factories belong to Anco with a total capacity of nearly 4 million tons of feed. 

After completing the deal, De Heus will have a total of 22 feed factories in Vietnam, officially becoming the top-one supplier of animal nutrition in the independent feed market with a nationwide scale of operation. In addition, De Heus and Masan also agreed to move forward with long-term strategic supply transactions in the joint agreement between the two Parties, in which De Heus will provide animal feed and pork for Masan.  

The combination of De Heus, a global corporation with more than 100 years of experience in animal nutrition, and Masan, a leading consumer and retail group in Vietnam; is considered a promising combination, which can accelerate the modernization of the animal protein value chain. 

 

6. SK Group (South Korea) buys 16.26% stake of Masan in VinCommerce 

  • Value: $410 million (16.26%) 
  • Industry: Retail 
  • Year: 2021 

On April 6, 2021, SK Group, the third largest multi-industry private conglomerate in Korea, decided to spend $410 million to buy Masan Group’s stake in VinCommerce (formerly a member of Vingroup, owning the Vinmart system, Vinmart+). The transaction valued VinCommerce at $2.5 billion. 

SK’s investment agreement has confirmed Masan’s ability to improve its operations with the intention of optimizing its store network and product categories, increasing profitability continuously through strict commercial profit margin management initiatives and cost savings.  

SK’s share acquisition in VinCommerce is a part of the its strategy to penetrate into Vietnam’s fast-growing market and make VinCommerce the largest O2O-integrated retailer in the Southeast Asia. Both believe in the substantial potential of the modern grocery retail sector in Vietnam. Modern trade (MT) is expected to account for 50% of the entire retail sector instead of just 8% today, which will make Vietnam the fastest growing MT market in the Asia Pacific region in the next decade. 

 

7. Thaco acquires Korean supermarket E-Mart in Vietnam 

  • Value: N/A (at 100% rate) 
  • Industry: Retail 
  • Year: 2021 

On May 25, 2021, Emart Korea and THACO signed an agreement to transfer 100% of capital and exclusive rights for this enterprise to take over Emart’s business in the Vietnamese market. At the end of 2021, THISO – a member corporation of THACO Group, officially completed the signing of the capital transfer agreement and exclusive franchise of business activities with Emart Inc. (Korea). 

According to Thaco’s representative, within the cooperation, THACO will be responsible for operating, managing and expanding the Emart supermarket system in Vietnam. Emart Korea will send a senior management team and maintain the supply of private label goods from Korea at competitive prices. 

Emart hypermarket that Thaco aims to integrate showroom, accompanied by food court, conference center, wedding party. In addition, Emart Vietnam also focuses and invests heavily in the Online Shopping App and the first Automated Pickup System in Vietnam. 

 

8. SCG (Thailand) acquires shares of Duy Tan Plastic Company (Vietnam) 

  • Value: $300 million (70% rate) 
  • Industry: Consumer Goods 
  • Year: 2021 

In a document sent to the Stock Exchange of Thailand (SET) on February 9, 2021, SCG Packaging (SCGP) announced the signing of an agreement to buy 70% of shares of Duy Tan Plastic Manufacturing Company. The subsidiary SCG Packaging (SCGP) was the legal entity to receive the transfer of shares. As a result, Duy Tan Plastics became a subsidiary of SCG. 

Regarding the Buyer, SCG Group has been operating in Vietnam since 1992 with more than 20 subsidiaries in Vietnam in 3 fields including petrochemicals, packaging and cement – construction materials. Meanwhile, Duy Tan – the Seller is one of the leading enterprises in the Vietnamese market in hard plastic packaging products, with the main customers who are multinational companies and domestic FMCG enterprises.  

According to SCGP’s information release, not only has the transaction expanded SCGP’s hard plastic packaging business across ASEAN, but also strengthened the company’s ability to serve FMCG manufacturers and consumers in Vietnam.  

 

9. EDPR Sunseap (Singapore) acquires all solar power projects of Xuan Thien Group 

  • Value: $284 million (100% rate) 
  • Industry: Energy 
  • Year: 2022 

On June 29, 2022, EDP Renewables (EDPR) – the world’s leading renewable energy producer corporation reached an agreement with Xuan Thien Group to acquire two solar power projects in Thuan Bac district, Ninh Thuan province, with a total capacity of 200 MWac (255 MWdc). 

Overview of the two parties, EDPR Sunseap – The Buyer is the developer, owner and operator of solar power systems based in Singapore and exploits solar projects across Asia with a project portfolio of nearly 10 GWac. Meanwhile, Xuan Thien Group – The Seller is a company with a remarkable position in the energy industry in Vietnam with the ability to implement the entire project development process from research, design, construction, operation and maintenance.  

Two solar projects of Xuan Thien Group have been in commercial operation since April 2020 and have Power Purchase Contract (PPA) with EVN for a period of 20 years, at $93.5/MWh. The two potential projects have successfully attracted a lot of investors, and were eventually acquired by EDPR Group for $284 million. 

The transaction will double EDPR’s operation capacity in Vietnam and strengthen the group’s presence in the Asia-Pacific region, a market that EDPR has entered in 2021. 

 

10. Swire Beverage Holdings acquires Coca-Cola bottling plants in Vietnam and Cambodia 

  • Value: about $1.015 billion 
  • Industry: Beverage 
  • Year: 2022 

Hong Kong Swire Pacific Corporation, a major investor in Swire’s beverage business in China and Hong Kong, has acquired Coca-Cola’s bottling business in Vietnam and Cambodia.  

Swire Pacific paid $1.015 billion in cash to Coca-Cola Indochina. According to a filing on the Hong Kong Stock Exchange on July 18, 2022, the company prepared, packaged, distributed and sold Coca-Cola beverages in both countries. The agreement must be approved for antitrust and will take effect within six months of signing the agreement. 

On the afternoon of January 2, 2023, the deal was officially completed. Swire Coca-Cola owns and operates three beverage production facilities, 18 production lines, six distribution centers throughout Vietnam and employs a direct and indirect workforce of more than 3,500 people.  

The completion of the transaction reflects Swire Coca-Cola’s pursuit of a strategic vision to expand its footprint in Southeast Asia, a dynamic region with tremendous growth potential. 

 

In conclusion, though the above M&A deals are only a few but they are notable proofs for the vibrant M&A market in Vietnam in recent years. Enterprises and investors can trust in M&A investment opportunities in the near future; despite the prolonged difficulties of the global economy, especially in the context of tight domestic capital, when many businesses are forced to restructure, sell assets, call for investment due to financial pressure. 

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