What is M&A? Deals M&A in Vietnam What major projects have been implemented in recent years? Follow the shares in this article.
What is M&A?
What does M&A stand for? M&A is an abbreviation of the English phrase Mergers and Acquisitions. This is an activity to gain control of a business through merger or acquisition between two or more businesses with the goal of owning part or all of the related business.
Mergers are the process of linking businesses of similar size, leading to the formation of a new business with independent legal status. All assets, rights, obligations and responsibilities of the merged businesses will be transferred to the new business. This merger is often carried out to take advantage of common advantages, create added value and achieve higher business goals.
Acquisitions are a form of business in which a large enterprise buys a smaller or weaker enterprise, in which the acquiring enterprise retains its legal status. Thereby, the acquiring enterprise legally owns the assets and control over the acquired enterprise. This process helps the large enterprise expand its scale, improve operational efficiency and exploit the valuable assets of the acquired enterprise.
The M&A deals in Vietnam not only to own shares but also to participate and decide on important issues in the merged or acquired enterprise. According to investment knowledge, M&A brings many benefits such as expanding market share, improving business efficiency, optimizing resources, reducing unnecessary costs and taking advantage of technology from related businesses.
Famous M&A deals in Vietnam create market waves
Here are some deals M&A Vietnam extremely famous, changing the structure of many leading industries today
UOB Bank acquires Citigroup's entire retail banking business
In January 2022, Citibank transferred its entire retail banking business in Malaysia, Thailand, Vietnam and Indonesia to UOB. By the end of March 2023, UOB had completed the acquisition of the first three markets, bringing the total customer base to 7 million. This number is expected to reach 8 million when the deal in Indonesia is completed by the end of the year.
The success of this deal was clearly reflected in UOB’s Q1/2023 business results. The bank recorded a sharp increase in net profit, reaching S$1.5 billion (equivalent to US$1.1 billion), up 67% compared to the same period last year.
In particular, profit before interest and tax from the consumer banking segment doubled to S$795 million, driven by strong contributions from Singapore, Malaysia and Thailand. This transaction is not only a major step forward in terms of financial support, but also helps UOB expand its market share and consolidate its strong presence in the region.
Sumitomo Mitsui (SMBC) acquired 49% of FE Credit capital
On March 27, 2023, VPBank (Vietnam Prosperity Bank) officially announced the sale of 15% shares to Sumitomo Mitsui Banking Corporation (SMBC), a member of Japan's leading financial group, Sumitomo Mitsui Financial Group (SMFG). M&A in Vietnam This marks a turning point when SMBC Group becomes a strategic investor of VPBank, and opens a new phase of cooperation between the two sides.
Previously, in May 2022, VPBank and SMBC signed a Business Cooperation Agreement. At the same time at the end of 2021, SMBC Consumer Finance Company - a subsidiary of SMFG decided to purchase 49% shares of FE Credit, another subsidiary of VPBank. In addition, SMBC also supported VPBank to successfully raise capital from international markets.
This deal is not only an important milestone for the Vietnamese financial industry but also brings great strides for VPBank. Thanks to the smart investment From SMBC, VPBank's total equity will increase from VND103,500 billion to about VND140,000 billion, bringing this bank to the second position in the industry after Vietcombank.
The new capital helps VPBank consolidate its position in the market, while enhancing its ability to serve customers and partners, especially FDI enterprises and multinational corporations that are investing and will invest in Vietnam.
SK Group invests 410 million USD in VinCommerce
Early April, a deal M&A in Vietnam A notable investment was made when SK Group from South Korea officially signed an agreement to buy 16,26% of VinCommerce shares belonging to Masan Group, with a total value of up to 410 million USD. This deal not only helps to consolidate VinCommerce's position in the market but also demonstrates the strong interest of international corporations in the potential of the Vietnamese market.
Sumitomo Mitsui Financial Group (Japan) has bought 15% of VPBank shares.
On October 28, 2021, VPBank - Vietnam Prosperity Joint Stock Commercial Bank, announced that it had completed the transfer of 49% of charter capital at Vietnam Prosperity Bank Finance Company Limited (FE Credit) to SMBCCF, a subsidiary of Sumitomo Mitsui Group - Japan's leading financial group.
VPBank expects that reducing its ownership in FE Credit will help the bank strengthen its financial potential and expand its business operations into other potential areas. In addition, this deal will contribute more than VND4,000 billion to the state budget, affirming its important significance in both economic and development strategy.
Warburg Pincus has invested $250 million in Novaland
On June 1, 2022, Novaland Real Estate Investment Group Joint Stock Company, one of the leading real estate enterprises with large capitalization on the Ho Chi Minh City Stock Exchange, received an investment of 250 million USD from the investment fund group of Warburg Pincus, one of the largest private equity funds in the world.
Business M&A in Vietnam The partnership between Novaland and Warburg Pincus not only reflects the strong confidence of international investors in Novaland’s potential, but also opens up opportunities for Novaland to consolidate its position in the real estate industry. Thanks to Warburg Pincus’ global experience and expertise, Novaland will increase its project implementation capacity, expand its land bank and improve its business efficiency.
The $250 million investment will be used not only to expand the land fund but also to develop Novaland's existing projects in strategic locations, especially in the southern region of Vietnam where infrastructure is developing strongly.
This is also a testament to Warburg Pincus' long-term commitment to the Vietnamese market, as this is their sixth investment in Vietnam since 2013. With more than 1.5 billion USD invested in large enterprises such as BW Industrial Development, Lodgis Hospitality, Techcombank and Vincom Retail, this proves that Warburg Pincus believes in the growth potential of the Vietnamese economy and is always looking for investment opportunities in potential sectors.
M&A deals in Vietnam not only strategic but also tells a story about cooperation, exploring potential and building new value. In the future, the market M&A in Vietnam is expected to continue to witness larger-scale deals, contributing to bringing great value to the economy and society, while affirming Vietnam's position on the global economic map. Thank you for reading the article. HVA.
