Vietnam M&A market expected to bloom in 2025: expert

Vietnam’s merger & acquisition (M&A) activity is projected to surge in 2025, following a strong recovery last year, said Nguyen Cong Ai, a partner at KPMG Vietnam.

According to KPMG Vietnam, after a lackluster 2023, the M&A market in 2024 showed positive signs, with a total transaction value of $3.2 billion in the first nine months of the year, up 46% year-on-year.

A standout feature of 2024 was the prevalence of domestic deals, with large transactions led by Vietnamese investors. This showed that domestic companies are adjusting their business strategies and optimizing their operations to focus on core sectors amid a challenging business environment.

Conglomerates Vingroup and Masan Group were two prominent players, executing a series of high-value deals.

Vingroup's significant deals

Vingroup (HoSE: VIC), led by billionaire Pham Nhat Vuong, made a big echo in 2024 with several high-value transactions totaling billions of USD.

In March 2024, Vingroup announced the sale of its entire stake in SDI Trading Development and Investment JSC, the parent company of Vincom Retail (HoSE: VRE).

Analysts estimated the deal's total value at VND39.1 trillion ($1.54 billion). In March and June, the group transferred 70.77% of SDI shares, generating VND27.65 trillion ($1.1 billion) in proceeds, with a profit of VND15.5 trillion ($635 million), reflecting a remarkable 56% return. By September, Vingroup had completed the transfer of the remaining 29.23% of SDI shares, but the value was not disclosed.

The new owners of SDI are a group of companies based in Ho Chi Minh City, linked to Nguyen Hoai Nam, a new member of Vincom Retail’s board of directors. They are NP Business Investments JSC, Thien Phuc Business Investment and Development JSC, Falcon Business Investment and Development JSC, and Emerald Business Investment and Development JSC.

Nam is CEO of Berjaya Vietnam, a subsidiary of Malaysian conglomerate Berjaya Corporation Berhad, which operates in retail, real estate, hospitality, and lottery. However, Nam has denied being involved in Vincom Retail as a representative of Berjaya.

In May and November, Vingroup also announced the sale of two real estate companies involved in the development of the Vu Yen ecological park and residential and entertainment complex in the northern city of Hai Phong.

While the exact deal value was not disclosed, it is likely to be in the tens of billions of USD. Specifically, Vingroup sold all its stakes in NVY Vietnam Development and VYHT, with 80% of the shares in both companies acquired by foreign investors, and the remaining going to Vinhomes, the real estate arm of Vingroup.

In November, Vinhomes made headlines with the largest buyback in the company’s history, purchasing nearly 247 million out of over 370 million shares for nearly VND10.5 trillion ($440 million).

On December 5, US tech giant Nvidia announced the acquisition of VinBrain, a Vingroup subsidiary in the healthtech sector, to develop a large future design center in Vietnam.

Masan Group's key transactions

Near the end of 2024, Masan High-Tech Materials, a subsidiary of Masan Group (HoSE: MSN), completed the sale of its 100% stake in H.C. Starck Holding (Germany) GmbH to Mitsubishi Materials Corporation Group (MMC Group) for $134.5 million, with an anticipated profit of $40 million.

Masan had acquired H.C. Starck in 2020, but due to regulatory challenges in Vietnam, they decided to divest in order to focus on its domestic business operations.

On the other hand, Masan Group invested $200 million to acquire a 7.1% stake in WinCommerce from SK Group, increasing its ownership to 78.6%. WinCommerce operates over 130 WinMart supermarkets and more than 3,600 WinMart+ mini markets. In Q3/2024, WinCommerce reported a profit of VND20 billion ($850,000), marking its first profit since the Covid-19 pandemic.

In early 2024, Masan raised $250 million from Bain Capital, one of the world’s leading private equity firms that manages total assets of $180 billion. The investment was made in the form of convertible preferred equity with a fixed dividend of 0% for the first five years, increasing to 10% per year from the sixth year onward. This capital infusion is expected to significantly strengthen Masan Group’s balance sheet, reduce financial leverage, and lower interest expenses.

In the securities sector, Vietcap raised $158 million by issuing 143.6 million shares via private placement to 64 investors, including major foreign funds such as PYN Elite, Dragon Capital, and Apollo Asia.

Regarding the insurance field, DB Insurance Co, Ltd from South Korea made headlines by acquiring a 75% stake in both the Vietnam National Aviation Insurance Corporation and Saigon-Hanoi Insurance Corporation, with an estimated transaction value of $118 million.

The real estate market also saw bustling activity. Industrial park developer Becamex IDC sold a project worth $553 million in the southern province of Binh Duong to Sycamore Company Limited. Kim Oanh Group transferred its stake in the Binh Duong-based The One World urban area, valued at $350 million.

Other major transactions included Bitexco’s sale of 100% of the One Central HCM project and Nam Long’s sale of a 25% stake in the Paragon Dai Phuoc project in the southern province of Dong Nai.

Outlook for 2025

2024 can be seen as a pivotal year, setting the stage for a new era – the era of the nation’s rise. Nguyen Cong Ai, a partner at KPMG Vietnam, forecast that the M&A market in Vietnam will "blossom" in 2025, achieving impressive numbers.

According to him, this year, M&A activity in key sectors like technology and real estate is expected to surge, driven by government support policies. Investment is shifting towards technology and tech-enabled services, fueled by government initiatives and reforms, including tax incentives for high-tech industries and efforts to streamline foreign investment processes, which will ease barriers for international investors.

The real estate market is also poised for stronger growth as the corporate bond market stabilizes and the new Land Law clarifies land valuation methods and establishes new regulations for land use, enhancing market transparency. Meanwhile, domestic demand is expected to strengthen as investor sentiment improves and consumer demand picks up, he noted.