Three factors to drive Vietnam's bustling M&A market in 2025: KPMG exec

Vietnam's mergers and acquisitions (M&A) market is expected to thrive in 2025, fueled by GDP growth, e-commerce expansion, and infrastructure development, says Nguyen Cong Ai, a partner with KPMG Vietnam.

Ai shared the above information at an M&A Vietnam forum held on Wednesday in Ho Chi Minh City.

M&A in nine months up 46% year-on-year

The first nine months of 2024 saw a 46% increase in M&A transactions, with total value of $3.2 billion across more than 220 deals compared to the same period in 2023, Ai said based on the KPMG study.

He noted that this spike could reflect a rebound from 2023’s lower baseline. Interestingly, domestic investors have taken the lead, accounting for 53% of the total announced transaction value, largely driven by internal business restructuring.

In 2024, there is a tendency for M&A deals to not be foreign investors buying domestic companies, but domestic firms purchasing and selling. Due to the more protectionist policies of countries, money is hesitant to flow abroad when interest rates are high.

In terms of structure, M&A transactions in the nine months mainly took place in the fields of real estate (accounting for 53%), fast moving consumer goods or FMCG (14%), and industry (21%). These three fields accounted for 88% of the transaction value and saw deals among the largest.

2025 M&A to be bustling

According to Ai, in 2025, M&A will be bustling. He pointed out three factors that will positively affect the M&A situation in 2025.

First, according to forecasts, Vietnam's GDP in 2025 could be above 6%, and FDI will continue to grow. Second, e-commerce continues to be a driving force for economic growth. Technology and consumers using technology are increasing.

Third, infrastructure has been improved, with the government promoting projects such as Long Thanh Airport and metro lines.

Speaking at the forum, Nguyen Duc Tam, Deputy Minister of Planning and Investment, stated that M&A have become an effective capital mobilization channel, contributing to diversifying investment attraction activities for the Vietnamese economy.

"The Vietnamese M&A market has always been assessed by foreign investors as a safe, attractive, and potential market, a place where one can place their trust in growth potential as well as investment opportunities," said Tam.

He noted that the National Assembly, the country's legislature, has just approved the Socioeconomic Development Plan for 2025 - the final year of the 2021-2025 term, which is identified as a breakthrough year to reach the finish line, creating the premise to bring the Vietnamese economy into a new era - the era of national development. One of the important goals for 2025 is to achieve GDP growth of 6.5-7%, striving to reach 7-7.5%.

To achieve this goal, the National Assembly has proposed 12 groups of tasks and solutions for the 2025 socio-economic development plan, including drastic removal of institutional bottlenecks.

“I believe that when the proposed solutions are implemented drastically and effectively, the Vietnamese economy can make a breakthrough and accelerate to reach the finish line in 2025. This will be an important foundation for us to continue attracting foreign investment in general and investment through M&A in particular,” said Tam.