Vietnam’s M&A market faced rough seas in 2023: KPMG exec
Vietnam's M&A market in 2023 followed the global downward trend even though the national economy remained relatively stable, writes Nguyen Cong Ai, KPMG Vietnam's deputy general director.

Nguyen Cong Ai, KPMG Vietnam's deputy general director. Photo by The Investor/Le Toan.
Although inflation was well controlled and GDP growth reached 5.05% last year, Vietnam was not an exception to the slowing trend of the global M&A market, with transaction value in the first 10 months of 2023 (10M2023) dropping 23% from 2022. The number of successful deals was also lower than two years ago.
However, Vietnam's internal economic factors were still maintained, with stable FDI inflows and the government's strong commitment to infrastructure construction and economic reform. The temporary decline in the M&A market can be seen as part of a broader economic cycle, with 2023 being a year when the market found a balance towards sustainable development in the following years.
The significant jump in the average transaction value of announced deals reached an average of $54.5 million per transaction in 10M2023, three times higher than in 2022, showing that investors were proactively seeking strategic deals.
Domestic investment slows down, foreign capital flows strongly
The market experienced a fever in trading value and volume by domestic investors during the 2020-2022 period, as many domestic companies consolidated their market shares and business segments. However, the wave of M&A investment with domestic capital peaked last year with a value of more than $1.3 billion.
In 10M2023, as domestic investors turned defensive to reassess their strategies, their total transaction value dropped to $161.6 million, accounting for about 4% of the total value of announced transactions.
Unlike two years ago when domestic investors dominated, foreign investors returned to overwhelm all five leading positions in terms of transaction value in 10M2023. Japan, Singapore, and the U.S. continued to be the most active foreign investors, together making up over 70% of the total announced transaction value.
Foreign strategic investors dominate huge deals
Foreign investors led the way in big deals in 2023. The biggest deal of the year was Japan's Sumitomo Mitsui Banking Corporation (SMBC) spending $1.45 billion to buy back a minority stake in Vietnam’s private lender VPBank, after previously purchasing 49% of FE Credit, a subsidiary of this bank in 2021.
The purchase of a 15% stake in VPBank was the largest M&A deal ever recorded in the Vietnamese banking industry.

FV Hospital in Ho Chi Minh City. Photo courtesy of the hospital.
The healthcare industry also witnessed the largest deal ever in 2023 when Thomson Medical Group, one of Singapore's largest private medical service providers, spent more than $380 million to buy dominating shares at FV Hospital in Ho Chi Minh City.
This also marked the first time Thomson Medical Group had invested in Vietnam, a promising medical services market with an aging population and rapidly increasing per capita income.
Although M&A activities of the consumer goods industry in general slowed down due to unfavorable macroeconomic conditions, the consumer discretionary industry still witnessed a large deal worth $200 million, with the famous American company Bain Capital investing in Masan Group as its first deal in Vietnam. This marked an important milestone for the domestic consumer goods industry and showed the industry's attractive prospects.
Big deals in real estate
Although the legal environment remained challenging with increasing control by authorities on legal requirements for real estate projects in 2023, strategic investors still paid attention to high-quality real estate with full legal status. Therefore, the real estate sector witnessed big deals in 2023 with the total transaction value nearing billions of U.S. dollars.
The largest deal in the sector was the acquisition of strategic shares in BW Industrial, one of the biggest and fastest growing industrial and logistics developers in Vietnam, for $450 million by a foreign investor based in Singapore. BW Industrial plans to use the new capital to continue its leading position in developing key infrastructure for the new economy and take advantage of the production relocation to Vietnam by many multinational companies.
In the field of residential real estate, Malaysia-based Gamuda Land acquired 100% shares worth $316 million of a large project in Ho Chi Minh City from Tam Luc Real Estate Corporation to expand its land bank in Vietnam. This investor is planning a $1.1 billion high-end complex project on the newly acquired land in the center of Thu Duc city, HCMC.
Besides commercial feasibility, the properties most sought after by foreign investors often possess a solid legal foundation with full legal procedures.
Regarding M&A value by industry, financial services, real estate and healthcare dominated, accounting for more than 80% of total transaction value and possessing four among the five largest transactions in 10M2023. Compared to the previous year, financial services and healthcare replaced consumer goods and industry as the leading sectors in terms of transaction value.
Meanwhile, key advances in other fields such as consumer discretionary, technology, and energy and utilities signalled growth potential and future opportunities.
Vision 2024
Prudent growth will be driven by investment in strategic industries this year. Looking ahead, Vietnam's M&A market is poised for growth in 2024, supported by many economic advances and reforms aimed at attracting FDI, with deals increasing in real estate, renewable energy, technology, and healthcare.
The investment trend in these industries will be driven by the development of transport infrastructure, the transformation of the economy towards green trends, and digital transformation. The health sector is expected to be driven by changes in population structure, while the property industry will continue to be attractive thanks to high demand for quality assets, both industrial and residential real estate.
Growth engines in 2024 will include strong FDI inflows, stable politics and the signing of trade agreements. Furthermore, with inflation to be curbed below the 4% target, Vietnam's GDP growth is forecast to return to 6-6.5% in 2024 and 6.9% in 2025, and public debt will be below the ceiling level of 60% of GDP.
These figures show that 2024 could be a favorable year for M&A investors targeting strategic opportunities in the dynamic Vietnamese market.
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