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During the last 18 months, M&A transactions have skyrocketed in Vietnam, but more generally in ASEAN, with ASEAN 2022’s total deal value transacted being close to $99B.

1/ ASEAN has shown resilience and became a major player on the M&A market

ASEAN countries benefit from a unique situation: if the pandemic had slowed down economic activities, they had not stopped completely. By taking full advantage of this context to refine their strategies through dynamic partnerships, 2/3 of ASEAN companies seem to have outperformed their foreign competitors during the pandemic.

Identifying lack of advanced technologies, cost and capital constraints, and lack of external guidance as major obstacles to achieve their strategic goals, ASEAN executives have focused their company strategy on the following sights:

  • Identify and invest in talent
  • Divest of underperforming assets or businesses
  • Make strategic acquisitions

As a result, the M&A market has never been that promising.

A. The M&A market in ASEAN is asserting itself as a key investment location

ASEAN is considered as a trusted region for foreign investors thanks to many factors such as massive internet penetration, regulations, tariffs/trade flows, technology enhancement… This growing attractiveness is reflected in the increase of the M&A market in ASEAN:

M&a Operation In Asean (2016 2022)

The ability to opt for a new strategy to maintain a business during the pandemic is one of the key strengths of ASEAN companies. And investors have well noticed this situation as the value of M&A deals skyrockets after 2020. In parallel, we observe that the number of deals is decreasing while the deal value keeps increasing, indicating a shift in the ASEAN M&A market: fewer deals of higher value, targeting higher capitalised companies.

Such a growth is expected to continue, as over the next three years, 50% of Southeast Asian executives forecast prospects and opportunity growth for their business. Part of these opportunities could come from ASEAN’s strategic geographical location: close to dynamic regions such as India, Japan or Oceania, ASEAN is pursuing cross-border agreements to become a major hub.

Within this economic region, some countries are more integrated than others to M&A deals: in 2019, before the pandemic, Singapore dominated the ASEAN M&A market by a wide margin, with a number of 54 deals worth a total of US$ 10.4B. However, Indonesia had the most significant deals with only 17 M&A deals and a total deal value of US$4.1B. Then, with the same deal value of US$ 2.2B, Vietnam and Thailand had 23 and 26 M&A deals respectively.

Once again, the value of deals isn’t proportional to their number, demonstrating a trend towards higher value deals, and therefore a move upmarket.

M&a Deal Operation In Asean Countries (first Half Of 2019)

After the pandemic, ASEAN has emerged as a leader in the M&A market as it has led the way, along with Australia and New Zealand, in deal volume for the first half of 2022.

B. A growth expected to last and allowing the development of new sectors

The corporate response to the pandemic has effectively boosted ASEAN’s economic activities, reinforcing its position as an attractive market for M&A activity.

Indeed, ASEAN should benefit from the realignment of the global supply chain: low interest rates, favourable financial markets, an abundance of private capital… creating key conditions for M&A activities.

As a result, companies which tend to perform while investing into the digital transformation and trying to seize M&A opportunities, are expected to generate greater value over the long term, and will thus be well positioned against their competitors.

We can also observe 2 insights for the forecast of the M&A market: firstly, it must be noted that the growth in tech startups, which is already well underway in the region, will continue and is expected to play a key role in ASEAN growing economy. Secondly, the regulation of public entities is a major driving force that several countries can use to become an even more dynamic and attractive primary market for foreign investors. This is notably one of the main expectations of Vietnam, for the coming years.

2/ Vietnam, one of the most dynamic M&A market in ASEAN

A. M&A Market in Vietnam: a robust growth facing more cautious investors

The Vietnam M&A Market has been receiving more attention from investors for its captivating environment over the years, especially since it joined the WTO in 2007. The country’s M&A market has rapidly expanded, experiencing a strong increase in the number of deals, and now a growth of deal value.

Total Transaction Value And Average Deal Size Per Year (2007 2021)

We can notice that the market suffered from the COVID-19 pandemic, with its overall M&A transaction value decreased by 13%, and by 2020, it was estimated to be only US$ 5,2B.

However, Vietnam is one of the least affected countries in ASEAN, benefiting from an ambitious economic framework, and reinforced by an increasing economic integration. In fact, the total value of deals in 2021 shows a return to a very strong activity, with a total of US$ 8.77B. This peak in activity following the pandemic seems to be losing momentum in 2022: due to various geopolitical concerns, investors are more cautious, which has caused a slowdown in M&A activity in Vietnam. According to KPMG (Vietnam M&A Forum 2022), the first ten months of 2022 recorded US$5.7 million, down 35.3% year-on-year. The number of transactions also decreased significantly from 694 in 2021 to 345 in the first ten months of 2022.

Another important dynamic of the M&A market in Vietnam is the investors. If the historical investors were Singapore, Japan, Thailand, South Korea or Taiwan, the domestic investors have recently made a jump in the market. In 2020, Vietnam was the largest investor in the M&A market, with a total value of US$ 2.2B, followed by the US (US$ 742m), South Korea (US$ 571m), Thailand (US$ 475m) and Japan (US$ 437m). Following the pandemic, the interest of local investors is explained in particular by the need to maintain a channel for mobilizing capital to recover quickly from the pandemic. In 2022, Vietnam still leads the country in M&A investment, but only for a total deal value of US$ 1.3B in the first ten months.

Top 5 Investors Of The Vietnamese M&a Market

Here are some significant deals in recent years:

  • April 2019: DHG Pharma became a subsidiary of Taisho after the Japanese company increased its ownership to 50.78%
  • April 2020: Stark Corporation (Thailand) purchased JSC Non-ferrous Metal and Copper Plastic JSC and Thinh Phat Electrical Cable Joint Stock Company’s whole share capital for US$ 240B
  • January 2021: Vinh Hoan Corporation’s purchase of a 51.29% interest in Sa Giang Import Export Corporation from State Capital Investment Corporation for a reported US$ 15.2m
  • October 2021: SMBC Consumer Finance (Japan) acquired a 49% stake in VPBank Finance Company (also known as FECredit) from Vietnam Prosperity Joint-Stock Commercial Bank (VPBank) for an estimated US$1.4B which is regarded as one of the biggest deals
  • 2022: A major player in the real estate sector purchased an office skyscraper in the center of Hanoi for US$ 523.4

Most of these deals were settled in very dynamic sectors in Vietnam: the consumer staples, industry, real estate and energy/utilities sectors accounted for over 80% of the total value of the M&A deals in the ten first months of 2022, according to KPMG (Vietnam M&A Forum 2022). The real estate sector is expected to remain a M&A hotspot as the demand for office and industrial properties keep growing.

M&a Value Breakdown By Sector
B. Construction of a legal framework to better support the operations


In Vietnam, there is no centralised legislation regulating M&A activities. However, there are a number of laws that can have a strong influence on this market.

A major one is The Law on Enterprises (Law No. 68-2014-QH13), in particular, the rights of organisations and individuals to form businesses, buy stock, and provide capital are described in the Article 18. State officials, children, and anyone facing criminal charges are among those who are not permitted to participate. In addition, the guidelines for a merger are set out in Article 195, which states that a legal representative of the company must resolve any potential conflicts with the Competition Law with the administrative body responsible for competition. After the merger, the newly created company is required to inform the national business registration database.

The Law on Investment (Law No. 67-2014-QH13) also has to be taken into account as its Article 25 establishes the rights of the foreign investor in terms of capital contribution and purchase of capital or shares, as well as the procedure to be followed in Article 26. The Planning and Investment Department must be notified of the application for registration in order for it to be approved.

M&As are also subject to the Law on Competition and the Securities Law. The Competition Law, which came into force in July 2019, broadens the range of circumstances in which a merger is necessary to include total assets, revenue, transaction value, or market share of the participating party. The purchase of shares in a public business, including open tender offers, is governed by Security Law.


There are various restrictions for the M&A market in Vietnam, one of which is the complicated nature of Vietnam’s tax regimes. The primary impact taxes have during  M&As in Vietnam is capital gains tax, which may be either corporate income tax (CIT) or personal income tax (PIT). It is applicable to the purchase of shares of stock or capital contributions in Vietnamese enterprises. If a favourable tax treaty does not provide an exemption, capital gains for foreign sellers are subject to a 20% capital gains tax. The amount of the sales proceeds less the investment cost and transfer costs is used to calculate the taxable gain.

For foreign investors, there are generally no restrictions on the ownership of charter capital by them in Vietnamese businesses. However, there are some exceptions that apply to businesses in certain service sectors, such as banking, education, distribution, etc., where foreign ownership is prohibited, restricted, or subject to conditions under WTO commitments. It should be noted that Vietnamese licensing authorities frequently exercise discretion in deciding whether or not to give appropriate regulatory licences for M&A transactions in industry sectors that are not explicitly listed in the WTO Commitments or otherwise formally specified.

Vietnam does have some more restrictions about foreign investment depending on the type of project, such as the Antitrust regulations, the labour law regulations, the national security review for instance.

Final thoughts

According to the Vietnam M&A Forum 2022, experts are confident about the M&A market opportunities in Vietnam in 2023 and the decrease observed in 2022 is temporary and growth will recover quickly. Moreover, it must be noted that macroeconomic instability, governance challenges, and a lack of market transparency are still the top concerns for investors. M&A transactions in Vietnam is predicted to be one of the most important and efficient entry points into this market. Even more since the Vietnamese government has committed to support it with a defined legal structure.

The country remains a safe environment for investing with political stability, free trade agreements, low-cost based destination, developing technology, affordable labour supply. Its attractiveness is demonstrated by the major investments from Japan, South Korea, and Singapore. Both Western and domestic investors in the country are showing increased interest: it is projected that investment from the US and the EU would increase and continue to play a crucial role in Vietnam in the future.