Vietnam M&A Research Report 2019 - FiinResearch

VIETNAM M&A 2019
Research Report
Issue 9 | August 2019
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2Vietnam M&A 2019 Research Report| Issue 9 | August 2019
Preface
FiinGroup is pleased to present our intensive
report of Vietnam M&A 2019. In addition to
the M&A data mining, we also focus on M&A
opportunities by featuring some industries
where we recognize potential investment
opportunities arising given its new dynamics
and regulatory developments. We also covered
the latest state of SOE IPOs and divestments,
in-depth sector reviews and outlook for the
years ahead.
The report utilized our 9-year M&A historical
data in Vietnam. In addition to data analysis,
the report also leverages on the authors’
extensive knowledge and experience in
advising various M&A transactions in Vietnam.
We have surveyed relevant foreign and local
institutional investors as well as conducting a
number of in-depth interviews with
experienced M&A advisers and Government
officials during our preparation.
We strongly believe that this report will be
valuable to institutional investors, investment
companies and foreign players who are
considering M&A as a strategy to set a
foothold or to expand your business in
Vietnam.
About FiinGroup
This report is prepared by a team of
experienced analysts, researchers and data
clerks at FiinGroup. FiinGroup is the
Vietnam’s leading integrated service provider
of financial data, business information,
industry research and other premium advisory
services.
Our Mission is to Enlighten the Market. We’re
on a mission to help investors and enterprises
grow their businesses and gain competitive
advantage with the trusted information and
data provided by FiinGroup.
FiinGroup is now serving thousands of
corporate clients including securities
companies, research houses, asset managers,
investment companies, industry players as
well as sophisticated individual investors.
Our Market Research division has been
established as the first independent research
house in Vietnam, covering various major
sector in Vietnam and providing local insights
to our clients at quality standards of the
World’s prestige advisory firms. More details
can be found at http://fiinresearch.vn/.
If you have any questions about this report or
our services, please do not hesitate to contact
Dong Le, Director of Market Research Services
at dong.le@fiingroup.vn or +84 (24) 3562
6962, ext 110.

Table of contents
@ 2018 FiinGroup JSC
All rights reserved. All information contained in this publication is copyrighted in the name of FiinGroup, and as such no part of this publication
may be reproduced, repackaged, redistributed, resold in whole or in any part, or used in any form or by any means graphic, electronic or
mechanical, including photocopying, recording, taping, or by information storage or retrieval, or by any other means, without the express written
consent of the publisher.
PREFACE 2
Table of figures 5
Abbreviation 6
1. M&A in Vietnam at a glance 7 - 10
1.2 Key facts and figures 8 – 9
1.2. Key findings & key trends to watch 10
2. Business landscape 11 -14
3. 2018-1H2019 M&A in Review 15 – 34
3.1. 2018-1H2019 M&A in a nutshell 15– 21
3.2. Inbound M&A 22 – 28
3.3. Domestic M&A 29 – 32
3.4. Outbound M&A 33 – 34
4. Sector review 35– 57
4.1. Real estate 35 – 40
4.2. Industrial goods and services 41 – 43
4.3. Food and beverage 44 – 46
4.4. Banks 47 – 49
4.5. Emerging sectors for M&A: Health care, Education and Utilities 50 – 57

Table of contents
@ 2019 FiinGroup JSC
All rights reserved. All information contained in this publication is copyrighted in the name of FiinGroup, and as such no part of this publication
may be reproduced, repackaged, redistributed, resold in whole or in any part, or used in any form or by any means graphic, electronic or
mechanical, including photocopying, recording, taping, or by information storage or retrieval, or by any other means, without the express written
consent of the publisher.
5. Key themes 58 - 71
5.1. Valuation Review 58– 60
5.2. Updates on SOE IPOs and Divestment 61– 65
5.3 FTAs and opportunities 66 -68
5.4 Regulatory updates, barriers to M&A in Vietnam and expected changes 69-73
6. Outlook and perspectives 74-75
Appendices & Disclosures 76-93
Our Methodology 94-95
Important Disclosures 96

Table of figures
Figure number Tittle Page
1 Vietnam GDP Growth 2015-2021f 13
2 Vietnam Population structure 14
3 Vietnam urbanisation rate 1980-2018 14
4 Vietnam M&A Market size 2008 – 6M2019 16
5 M&A average deal size (US$mn) 2008-6M2019 17
6 Proportion of Deal Value (US$mn) and Number of Deal by value ranges 18
7 Total M&A Deal Value (US$mn) & Number of Deal by Top Sectors, 2018 19
8 Total M&A Deal Value (US$mn) & Number of Deal by Top Sector, 1H2019 20
9 Total Deal Value by Category, 2013-1H2019 21
10 Inbound M&A (US$mn) in Vietnam, 2013 - 1H2019 23
11 Top 8 Inbound M&A Deals, 2018 – 1H2019 23
12 Inbound M&A (US$mn) Deal by Country, 2018 24
13 Inbound M&A (US$mn) Deal by Country 1H2019 25
14 Inbound M&A (US$mn) into Vietnam by South Korean Investors, 2011 – 1H2019 26
15 Inbound M&A (US$mn) into Vietnam by Singaporean Investors, 2011 – 1H2019 27
16 Inbound M&A Activities (US$mn) by Top Sector 28
17 Domestic M&A Total Deal Value (US$mn) & Deal Number, 2011 – 1H2019 30
18 Domestic M&A activities by top sector 31
19 Domestic M&A Deal Value (US$mn) & Deal Number in Construction & Materials 32
20 Outbound M&A Activities (US$mn) 2011-1H2019 by Vietnam Domiciled Enterprises 34
21 Inbound M&A Activities (US$mn) in Real Estate, 2011 – 1H2019 36
22 Domestic M&A Activities (US$mn) in Real Estate, 2012 – 1H2019 38
23 Inbound M&A Activities (US$mn) in industrial goods & Services, 2011 – 1H2019 42
24 Total M&A Deal Value (US$mn) & Deal Number, Food & Beverage 45
25 Noticeable F&B deals in 2018 – H12019 46
26 Total M&A Deal Value (US$mn) & Deal Number, Banking 48
27 Recent Divestments in the Banking Sector 48
28 M&A Deal Value (US$mn) & Deal Number 2011-1H2019 51
29 M&A Deal Value Proposition, 2011-1H2019 51
30 Education M&A Deal Volume, 2011-1H2019 53
31 Education expenditure of Vietnamese people, US$bn 54
32 Vietnam's school age population (millions) 54
33 Outbound internationally mobile tertiary students (Thousands) 54
34 Utility M&A Deal Volume, 2011-1H2019 55
35 Number of Solar Power projects registered and completed 56
36 Top M&A deals in renewable energy 2018-1H2019 57
37 Valuation Multiples of 2018-1H2019 M&A Deals 59
38 Valuation Multiples of 2018-1H2019 M&A Deals by Sector 60
39 Number of successful IPO 2011-1H2019 62
40 Number of IPOs 2016-2020: Plan vs Actual 62
41 Divestment volume 2017-2020: Plan vs Actual 63
42 Top upcoming SOE Divestments under SCIC’s portfolio 64
43 Charter capital (US$mn) of upcoming IPOs 65
44 Number of upcoming IPOs by sector 65
45 Vietnam Inbound M&A Deal Value (US$mn) by Country 77
46 Total Deal Value (US$mn) in Vietnam by sector 77
47 Vietnam M&A Market by ICB Level II Sector, 2018 – 1H2019 78
48 Vietnam M&A Market by ICB Level IV Sector, 2018 – 1H2019 79-80
49 Valuation Multiples of M&A Deal by Sector, 2018-1H2019 82
50 Upcoming IPOs 2018-1H2019 84
51 Top IPOs 2017-2020 86

Abbreviations
No . Word Stands for
1 CAGR Compounded Annual Growth Rate
2 CAR Capital Adequacy Ratio
3 CMSC Commission for the Management of State Capital at Enterprise
4 CPTPP Trans-Pacific Partnership (CPTPP),
5 AHFTA ASEAN-Hong Kong, China Free Trade Agreement
6 EVFTA EU-Vietnam Free Trade Agreement
7 EVIPA EU-Vietnam Investment Promotion Agreement
8 F&B Food and Beverage
9 FDI Foreign Direct Investment
10 FOL Foreign Ownership Limit
11 FTA Free Trade Agreement
12 IPO Initial public offering
13 M&A Merger and acquistion
14 MARD Ministry of Agriculture and Rural Development
15 MOC Ministry of Construction
16 MOCST Ministry of Culture, Sport and Tourism
17 MOH Ministry of Health
18 MOIT Ministry of Industry and Trade
19 MOST Ministry of Science and Technology
20 MPI Ministry of Planning and Investment
21 PC People's Committee
22 PM Priminister
23 RHS Right hand side
24 RE Renewable energy
25 SBV State Bank of Vietnam
26 SBV State Bank of Vietnam
27 SCIC State Capital Investment Corporation (SCIC)
28 SEGs & SCs State Economic Groups and State Corporations
29 SOE State-Owned Enterprise
30 SPA Shareholder purchase agreement
31 VAMC Vietnam Asset Management Company
32 Y-o-Y/Y/Y Year over year
33 YTD Year To Date

Section 1: M&A in Vietnam at a glance

Accumulated deal
volume 2003-2018
3,103
Deal volume
2018
266
M&A Deal value
2018
$7.54bn 21%
M&A Value growth
(CAGR) 2008-2018
% of Inbound
M&A value 2018
56%
Average deal size
2018
$28mn
Vietnam M&A in 2018: Key facts & Figures
Deal>$100mn as % of
2018 M&A value
Deal <$50m as %
of 2018 volume
M&A Top target sectors 2018Top winner inbound investors 2018
Country
Deal value
(US$m)
Singapore 1,412
South Korea 1,260
United States 525
Thailand 306
Japan 285
Vol (#)
Japan 18
South Korea 14
Singapore 12
Thailand 8
United States 6
Real Estate
38%
Banks
12%
Industrial
Goods &
Services
11%
Food & Beverage
11%
Construction &
Materials
7%
Financial Services
4%
Others
17%

Accumulated deal
volume 2003-2018
3,210
Deal volume
1H2019
107
M&A Deal value
1H2019
$2.15bn -55%
Decline in value y-o-y
% of Inbound M&A value
1H2019
67%
Average deal size
1H2019
$20mn
Vietnam M&A in 1H2019: Key facts & Figures
Deal>$100mn as % of
1H2019 M&A value
Deal <$50m as % of
1H2019 volume
M&A Top target sectors 1H2019Top winner inbound investors 1H2019
Country
Deal value
(US$m)
South Korea 1,047
Australia 200
Japan 128
Singapore 39
Thailand 26
Country Vol (#)
Japan 10
South Korea 3
Singapore 2
Thailand 2
Australia 1
Industrial Goods &
Services
53%
Health Care
15%
Construction &
Materials
12%
Food &
Beverage
7%
Utilities
7%
Travel &
Leisure
3%
Others
3%

6
M&A deals are focusing on industrial goods & services, construction &
materials, retail and real estate. This trend is predicted to continue.
Besides, Education, health care and pharmaceuticals and renewable energy
which having been hot over the past 2 years will also be on the radar of
investors in the time to come.
5
The signings of FTAs and CPTPP will stimulate foreign capital inflows and encourage foreign
players to seek investment opportunities in Vietnam, given the increasing transparency and
promising removal of 49% foreign ownership cap.
4
Migration of manufacturers from regional countries due to the ongoing
trade war will boost the demand for industrial real estate, including
warehouses and industrial parks.
8
Shifting of foreign manufacturers to Vietnam due to FTAs and
trade war also boosted the demand for Industrial Goods &
Services with key sectors such as logistics and transportation
services.
In order to accelerate SOE IPO/divestments in coming years, the
government is taking some aggressive steps, stipulating the deadline
for SOEs to hand over capital to SCIC to speed up divestment and
equitization. First,108 SOEs slated to be sold by SCIC between now
and 2020.
Singapore, South Korea, Japan and Thailand are expected to remain the major
foreign investors, driven by sovereign wealth funds, private equity and large
conglomerates.
Vietnam is thriving with robust economic growth and favourable social-economic conditions. Young
population, rapid urbanization and emergence of middle-income class have reciprocally nurtured strong
domestic consumer demand. In line with the upsizing economy, the M&A market size is facilitated to grow.
M&A activities in 2018 remained vibrant with the transaction volume being on par with previous years.
However, M&A value cooled down a bit due to pending significant deals as well as slow process of SOE
divestments. 2018 deal value reached US$7.54bn, decreased by 44% compared to 2017. Excluding US$4.7bn
from Thai Brev-Sabeco megadeal in 2017, the decline was 14% y-o-y. In other words, 2018’s deal value was
equal to 86% of 2017’s value without the Sabeco deal.
Although deal-making in 1H2019 was still quiet, achieving US$2.15bn (down 55% y-o-y), given on confidence
in realization of pending megadeals and speeding-up SOE divestment in 2H2019, we forecast M&A activities
will recover the growth momentum to reach around US$6.64bn by the end 2019, hence the full-year value
would also be equal to approximately 86% of 2018 deal value.
Key findings and trends to watch
Vietnam M&A market continued to be led by foreign investors. However, domestic
investors are getting proactive and aggressive in order to enhance market position.
1
2
3
7
SOE IPOs and Divestments are lagging far behind targets; Banks are
struggling in raising capital to meet Basel II by 2020 due to FOL of
30%, hence government actions to propel restructuring and easing
FOL will be main drivers for M&A.
Section 1: M&A in Vietnam at a glance| Key findings and trends to watch
Forecasted M&A value
in 2019: US$6.64bn
~86% of 2018’s
Key themes that shaped M&A in 2018-1H2019 and trends to watch in the years ahead:

Section 2: Business landscape
Macro-economic and business environment that foster
M&A activities in Vietnam

Age 15-64: 70%
Internet penetration Smart phone users
Per capital GDP
Vietnam in numbers
$245bn (2018)
Growth rateGDP
7.1% (2018)
6.7% (2021f) 3.27% (2018)
Inflation
1,723 new FDI projects (Jun 19, 26% y/y)
Registered capital: $ 7,41 billion
$2,564 (2018)
40%
Urbanization
Population
95.5mn (2018)
67%
(2017)
84%
(2017)
Average age: 32

Upbeat outlook for international capital inflows
• Tightening monetary in line with disciplined fiscal
policies helps Vietnam keep inflation below 4% since
2016, control the Dong within a narrow band and
reduce public debt.
• Since 2014, the Vietnam government has issued
Resolutions on enhancing business environment and
national competitiveness. Resolution No.02/2019
prioritises four tasks: Simplifying business
procedures; reforming in specialised inspections,
connecting the National Single Window Portal;
enhancing electronic payment and developing
innovation ecosystems and supporting startups.
• The new Competition Law and the Anti-corruption
Law entering into force from 1 Jul 2019 increase a
transparent, fair and competitive environment.
• If the new the Securities Law (proposed to be in
force from 2021) is approved by the end of this year,
foreign capital inflow is expected to soar in response
to the removing of the 49% foreign capital cap on
listed companies.
• Those remarkable efforts gave Vietnam the 69th in
World Bank’s latest Ease of Doing Business rating,
marking 30 steps advanced from 2014 (*). Within the
East Asia Pacific region, Vietnam ranked 2nd after
Malaysia. World Bank acknowledged Vietnam’s
positive progress in making doing business easier in
three aspects: Starting a Business, Paying Taxes, and
Enforcing Contract.
* Based on 10 indicators: The ease in Starting a Business, Dealing with Construction, Getting Electricity, Registering Property,
Getting Credit, Protecting Minority Investors, Paying Taxes, Trading across Borders, Enforcing Contracts, Resolving Insolvency.
Figure 1: Vietnam GDP Growth 2015-2021f
Source: FiinGroup, World Bank
• 2019 saw the signing of the EU-Vietnam Free
Trade Agreement (EVFTA), the EU-Vietnam
Investment Promotion Agreement (EVIPA) and
the entry into force Trans-Pacific Partnership
(CPTPP), ASEAN-Hong Kong, China Free Trade
Agreement (AHKFTA).
• The EVFTA, CPTPP, AHKFTA along with other
bilateral and multilateral agreements Vietnam
have signed or is negotiating, will increase
foreign capital inflows and encourage domestic
enterprises seeking business opportunities
oversea.
Commitment to macroeconomic stability and enhanced
business environment that encourage investments
Economic resilience momentum
Huge opportunities from free trade agreements
Escalating global tensions: Opportunities in challenges
6.7
6.2
6.8 7.1
6.6 6.5 6.5
6.5 6.3 6.5 6.3
5.9 5.9 5.8
0
2
4
6
8
2015 2016 2017 2018e 2019f 2020f 2021f
Vietnam East Asia & Pacific
In the context of escalating global tensions, Vietnam is emerging as one of the most attractive destinations for investors
seeking markets with high growth prospect, stable economic and political environments. Investment has also been
encouraged by recent government’s policy aiming to stabilize macro-economy and improve business conditions
• The US increasing sanctions on Iran and the
US-China trade war have let to a deceleration
in global trade and global business
confidence. Even so, Vietnam reached a 10-
year high growth rate of 7.1% in 2018
• In 1H2019, Vietnam GDP growth was softened
to 6.76 % and is expected to moderate to
6.6% in 2019 due to credit tightening, slower
private consumption and weaker external
demand, still outperforming the region.
• Over the medium term, Vietnam’s growth is
projected to stay resilient around 6.5%,
remaining one of the fastest-growing EAP
economies.
• As tariff tensions between the US and China
showing signs of complexity, many
manufacturers consider moving their
productions to other countries. Southeast Asia
wherein, Vietnam being a prominent candidate,
expected to gain the most benefits.
• As of 20 Jun 2019, Vietnam granted 1,723 new
licensing FDI projects, an increase of 26.1%
year-on-year. FDI capital inflows from January
to May 2019 hit a four-year high of $16.74
billion, up 61% year–on–year.

The market expects to see more investments to serve Vietnam’s
strong market demand
Without a doubt, the growth of investments in Vietnam is driven by foreign investors who are eager to
enter a market of 100 million people, with the emerging urbanising middle-class. Towards 2035,
favorable demographic factors will be the key resources of demand in consumer-oriented goods &
services. High penetration of internet and smartphone also indicate high potentials for the development
of e-commerce, fin-tech and other internet-based businesses. In the medium term, the fast aging
population will boost the demand for health care and other products & services aiming at elderlies
Vietnam‘s internet penetration rate and
smartphone users reached 67% and 84% of
population respectively as of 2017. Meanwhile,
only more than 10% of people shop online, less
than 40% of adult have a bank account, and over
90% of transactions are still made in cash.
Altogether these figures indicate a potential for
the future development of e-commerce, fin-tech
and other internet-based businesses.
Source: United Nation
The urbanising middle-class will be the key
resources of demand for future growth. The
need for housing and infrastructure will boost
the real estate market, especially the property
market. Also, increasing demand for high-quality
Health Care and Education, Travel, Retail, F&B,
and other consumer-oriented goods & services
are calling for multinational and large domestic
investors to enter the market.
Source: World Bank
Figure 2: Vietnam Population structure
Section 2: Business landscape that fosters M&A in Vietnam
Figure 3: Vietnam urbanisation rate 1980-2018
Golden but fast aging population,
People loving the internet and smartphone
0
5
10
15
20
25
30
35
40
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
• Increasing per capita income has led to a rapid
expansion of the middle-income class
population. By 2035, more than 50% of
Vietnam’s population will be middle-income
class as estimated by World Bank and
Vietnam’s MPI.
• Additionally, in 2019 and by 2020, Vietnam’s
urbanisation rate is expected to reach
approximately 40% according to the Vietnam
Urban Development Association. Thus, there
will be about 50% of Vietnam’s population will
live in urban areas until 2040s of the 21st
century.
Growing & urbanising middle-income class
• Vietnam is in the period of “golden
population” with the average age of 32, and
nearly 70% of the population are in working-
age (15-64) (UN). Abundant labour resources
will be a significant force for the growth of
the entire economy.
• ‘Golden population’ era is also witnessing
Vietnam become one of the fastest aging
nation in the time to come, driving demand
for Health Care and other products & services
aiming at elderlies.
23.0 23.2 22.5 21.2
70.3 68.9 67.7 66.9
6.7 7.9 9.8 11.9
0
20
40
60
80
100
2015 2020f 2025f 2030f
0-14 15-64 65+

Section 3: 2018-1H2019 M&A in Review
3.1 2018-1H2019 M&A in a nutshell
3.2 Inbound M&A
3.3 Domestic M&A
3.4 Outbound M&A

Shortage of megadeals and delayed SOE IPOs and divestments
drove a sharp decline in deal value
Source: FiinGroup
Figure 4: Vietnam M&A Market size 2008 – 6M2019
Section 3: 2018-1H2019 M&A in Review | 2018-1H2019 M&A in a nutshell
The deal-making has finally leveled off after hitting
an all-time high of US$13.43bn in 2017. In 2018, the
total M&A value plunged 44% to US$7.54bn. The
slump spread into 2019 that saw only 107 deals
completed at a value of US$2.15bn within the first
six months, translating into sharp decreases of 22%
in deal volume and 55% regarding deal value
compared to the same period last year.
This cooling-down does not really mean a crash,
however. With 266 deals completed, M&A volume
in 2018 was on a par with 2017’s total of 268
transactions. M&A activities were strong at the
beginning of 2018 with a flurry of large-scale
transactions by big names including the Singapore-
based GIC Private Limited acquiring a minority
stake in Vinhomes JSC for US$1.3bn or Vingroup’s
investment of US$500.8mn in 98% stake of Berjaya
VIUT LLC. Similarly, deal-making stayed busy in
2H2018, exceeding 24 deals from 2H2017
The deceleration was largely attributed to the
absence of blockbuster deals like the Sabeco-
ThaiBev at US$4.7bn, which standalone made up
51% of 2H2017 and 35% of 2017’s total deal value.
Total M&A value in 2018 actually recorded a 14% y-
o-y decline from the 2017’s value excluding the
mega Sabeco deal.
2018 M&A activity plummeted in value by 44% to US$7.54 bn from the 2017’s record due to the shortage of
megadeals and delay in SOE ‘s IPO and divestment. The market has stayed calm in the first 6 months of 2019.
Both the number and value of deals fell by 22% and 55% on 1H2018 levels.
2H2018 recorded a few big-ticket marque deals,
noticeably 10% of Masan by SK investment at
US$472.6mn.
Megadeals appeared sporadically in 1H2019. The
most notable case was the transaction of SK
Investment to acquire 6% of Vingroup for US$1bn.
Slow progression of SOE IPOs and divestments was
another reason for the drastic decline in deal
value since 2H2018. A series of large names such
as PetroVietnam, Agribank requested for a delay
of divestments and IPOs.
Deal value was not disclosed for around 30 deals in 2018 and 15 deals in 1H2019
3,732.6
9,691.6
5,003.5
2,721.6
2,153.3
162
105
138
129
107
1H2017 2H2017 1H2018 2H2018 1H2019
TOTAL DEAL VALUE (US$mn) NO. OF DEALS
118 34 61 299
1,719
1,117 1,140
1,750
6,314
5,131
3,472
4,851
6,388
10,188
13,429
7,544
2,153
-
120
240
360
480
600
0
3,000
6,000
9,000
12,000
15,000
Deal Value (US$mn) Number of deals (RHS)

M&A activities in 2018 and 1H2019 were flavored with bite-
sized transactions
Source: FiinGroup
Throughout 2018 and 1H2019, the M&A market was not as characterized by megadeals as 2017, but
bite-sized transactions. Figure 4 reveals a deep fall in the average deal size over the past 18 months.
After skyrocketing to US$50mn in 2017, the average deal value plunged to US$28mn and US$20mn by
the end of 2018 and 1H2019 respectively. This was indeed a return to regular scale in the absence of
megadeals. The drop in the average deal value was also affected by the fact that more than 30 deals
were completed last year, and 15 deals took place this year without disclosure of transaction value.
Regarding key areas of focus, Real Estate continued to lead both the deal value and volume in 2018,
followed by Banks, Industrial Goods and Services, F&B, and Construction Materials. The sectors that
stood out most so far in 1H2019, capturing 94% of total deal value were Industrial Goods & Services,
Health care, Construction & Materials, F&B, and Utilities.
Inbound and domestic deals remain the two key sources of capital. Outbound M&A, despite
accounting for an insignificant portion of the total M&A value showed great prospects. The reviewed
period 2018-1H2019 witnessed two big deals closed by Vietnamese companies oversea including FPT
Corp’s acquisition of 90% stake in the US-based tech-advisory firm Intellinet Corp and the transaction
made by Yeah 1 to acquire 100% of Youtube multi-channel network ScaleLab (although the deal value
was later net off as Yeah 1 sold the acquired stake back to the previous owner).
Overall, M&A activities in the last 18 months were portrayed by key foreign investors including
Singapore, South Korea, US, Japan, and Australia seeking minority stakes in large domestic
corporations such as Vingroup or Masan. Meanwhile, active local acquirers like Vingroup are
aggressively expanding their market share by buying majority shares in smaller domestic players.
Figure 5: M&A average deal size (US$mn) 2008-6M2019
7
4 5
27
35
26
19
17
33
50
28
20
0
12
24
36
48
60
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1H2019

Deal size analysis: Megadeals dropped, while bite-sized deals
expanded
Figure 6: Proportion of Deal Value (US$mn) and Number of Deal by value ranges
Source: FiinGroup
BY DEAL VALUEBY NUMBER OF DEALS
In terms of deal value
Megadeals valuing over US$100mn maintained
the major contribution to total M&A activities
over the last 3 years. However, 2018
witnessed a shift in the value contribution
among deal value ranges in which medium
sized transactions posted significant increases
against megadeals. In particular, 2018
recorded 16 megadeals worth US$4.93bn,
accounting for 62% of total M&A value and
representing a sharp decrease of 12% on
2017’s level. In contrast, the value portion of
transactions ranging US$5-25 and US$25-50
jumped from 7% each to 10% and 13%
respectively.
H2019 continued to see the rise of medium
sized deals ranging between US$5-25mn. To
date, the value contribution of this segment
jumped up to 15%. As the total number of
deals sharply decreased, megadeals like SK
Investment-Vingroup showed more significant
portion to total M&A value which is 66% in
1H2019. Deal value is expected to recover
along with the closure of more megadeals in
the second half of this year.
In terms of deal volume
Despite driving total M&A value, megadeals
accounted for a minimal proportion of total M&A
volume. The percentages have hardly changed
over the past 3 years, ranging between 4% and
7%. Meanwhile, most M&A deals during 2018-
1H2019 were less than US$30mn as afore-
mentioned. Notably, micro deals being less than
US$1mn soared from 4% in 2017 to 18% in 2018
before reaching 24% after the first half of 2019.
1H2019 also recorded more deals ranging
between US$1-5mn, making proportion of this
segment climb to 30% of total deal volume.
Megadeals are expected to come back amid
increasing M&A activity. Evidently, around 15 on-
going deals announced in 1H2019 are all
acquisitions of majority stakes. Additionally, the
fact that our database recorded around 30
pending deals since 2018 to date with notable
names such as the merger of PGBank to HDBank
which has recently received approval from SBV
for the acquisition. These clues spark the hope
for an improved performance for the M&A
activities by the end of 2019 and the years
forward.
4%
18% 24%
24%
24%
30%
28%
24%
21%9%
10%
4%8%
5% 3%
7% 6% 4%
2017 2018 1H2019
Less than US$1mn US$1-5mn
US$5-25mn US$25-50mn
US$50-100mn More than US$100mn
7% 10% 15%7%
13% 7%11%
12% 9%
74%
62% 66%
2017 2018 1H2019
Less than US$1mn US$1-5mn
US$5-25mn US$25-50mn
US$50-100mn More than US$100mn

2018 M&A: Real estate dominated M&A scene
Sectors with highest M&A value
• Real estate continued to be the most vibrant
sector, generating US$2.84bn, equivalent to
38% of the year’s M&A activities. Apart from
GIC Private Limited’s acquisition of 5.7% in
Vinhomes, this sector also witnessed three
other megadeals closed by two key players
Vingroup and Novoland. Megadeals amounted
to US$2.1bn contributing to 74% of the entire
sector M&A value. Overall, M&A activities in
sector are currently driven by the expansion
of key players like VinGroup and Novaland to
accelerate their land bank for future
projects.
Emerging sectors in M&A
• Recently foreign investors have been keen
on some emerging sectors including Health
care (especially pharmaceuticals , Utilities,
(especially renewable energy) and
Education (*) As a results, M&A deals have
been flowed into these sectors over the past
18 months
Sectors with highest M&A volume
• Industrial goods and services scored third
highest in deal value (reaching US$801mn
accounting for 10%), but the highest in deal
volume. These sectors are benefited by
strong domestic demand amid growing
population and rapid urbanization that
enhance investor confidence. The most
active subsectors include Electronic
components and equipment, container
packaging and transportation services. In
2018, industrial goods and services saw
around 45 deals closed or approximately 17%
in total M&A deal number in 2018.
• Banks & Financial Services, Construction &
Materials and F&B and Utilities maintain
stable growth over the last few years. These
sectors combined account for more 37% of
total M&A market value. Besides the
Warburg Pincus LLC-Techcombank, 2018
recorded two more completed inbound deal
in which standard chartered sold minority
stakes of 6% to Alp Asia Finance (Hong Kong)
at US$220mn and 5% to Estes Investments
Limited (US) at US$152mn.
Figure 7: Total M&A Deal Value (US$mn) & Number of Deal by Top Sectors, 2018
Source: FiinGroup
(*): Education is classified as Business Training & Employment
Agencies in ICB Level 4.
2,844
928
801 798
521
332
215 211 189 169 102 99 94
240
41
6
45
21
18 18
22
14
16
8 7 7
10
33
0
600
1,200
1,800
2,400
3,000
0
10
20
30
40
50

1H2019 M&A: Domestic consumer-oriented sectors on the rise
Industrial goods and services secured the top
position
• Industrial goods and service remained the
most active sector for M&A activities with 25
deals worth US$1.13bn, accounting for 52.5%
of total deal value and 23% in total number of
deals in 1H2019. Notably, this period
recorded a megadeal worth more than US$1bn
completed by the Korea-based SK Investment
Vina acquiring 6% of Vingroup.
• Other domestic consumer-oriented sectors
such as Construction & Materials, F&B and
Utilities continued to be among the key
attractions for M&A due to consistently
growing demand from the local market. The
increasing of young households, rapid
urbanization and emerge of the middle-
income population segment are expected to
remain the key drivers of growth in these
sectors.
• Health care, Renewable Energy, F&B,
Utilities, Personal & Household Goods
maintained their attraction in 1H2019. In
fact, deal makers of some transactions in
these sectors kept in secret the deal value;
hence the total M&A value in these sectors
should have been higher.
•
Real estate, Banks and Financial Services
had a pause
• Real Estate was drastically silent and
disappeared from top 5 most active sectors
due to SBV’s credit tightening to real
estate which caused domestic capital
inflows to projects to reduce sharply, but
potentially attract foreign capital later on.
• Similarly, Banks and Financial services
were quiet within the first due. The total
number of deals and deal value were
strongly impacted by pending deals from
2018. Banking and financial services
belong to the list of businesses that
required special approval from government
bodies, hence the process usually takes
time. Evidently, our database recorded 5
pending deals from last years to date with
notable names such as the merger of
PGBank to HDBank which has recently
received approval from SBV for the
acquisition. Therefore, M&A activities in
these sectors are expected to recover soon
upon the materialization of these pending
deals, along with the movement of banks
under pressure of raising capital to meet
Basel II in 2020.
Figure 8: Total M&A Deal Value (US$mn) & Number of Deal by Top Sector, 1H2019
Source: FiinGroup
1,130
325
263
158 144
54 27 18 18 6 4 6
25
8
17
8
14
2 2
3
6
3
5
14
0
6
12
18
24
30
0
250
500
750
1,000
1,250 Deal Value (US$mn) Number of deals (RHS)

Vietnam on track for strong revival in domestic consolidations
Figure 9: Total Deal Value by Category, 2013-1H2019
Source: FiinGroup
• 2018 was marked with the revival of domestic
consolidations. In 2017, the value contribution
of domestic M&A slumped to 12%, while deal size
also registered a record-low due to the flow of
inbound megadeals. The growth momentum was
regained in 2018 as Vietnamese investors
doubled the M&A deal value to US$3.25 from the
2017’s number, thereby making an impressive
contribution of 43% to the total transaction
value, such a strong rebound after a steep fall
that brought domestic acquirors back on track to
closely approach foreign players.
• Throughout 2018-1H2019, the domestic sector
appeared to dominate the market, considering
the deal volume. However, in terms of deal
value, inbound M&A remained the dominator of
the Vietnam M&A market. After a year staying
calm, moving into 1H2019, foreign investors
swiftly stepped back the pace and scale of their
merger and acquisition to account for 68% of
1H2019’s total deal value. Meanwhile, domestic
deals were still active but accounted for a
humbler proportion of 32.5% in terms of value
contribution
• In terms of average deal value, foreign
investors tend to seek for sizable deals to
quickly get a foothold in the market. Thus,
the inbound sectors were usually marked
with megadeals.
• Both cross-border acquisitions and domestic
consolidations are expected to maintain a
strong momentum during 2019-2021, fueled
by new progressions from the State's
roadmap to divest from large corporations,
adoption of FTAs as well as government’s
upcoming plan to remove 49% foreign
ownership cap on listed companies
• To date, outbound M&A remained
consistently inconsiderable, with a negligible
contribution to the total M&A activities
throughout the years from 2013 to 1H2019.
Nonetheless, 2H2018 and 1H2019 saw
Vietnamese technology players FPT Corp and
Yeah 1 expanded with significant deals in the
US as afore-mentioned
Average Deal Value
Deal value (US$bn)
2017 2018 1H2019
Domestic 1.6 3.25 0.7
Inbound 11.75 4.2 1.45
Number of deals
Domestic 113 174 81
Inbound 148 82 25
14.1 18.7
8.6
79.4
51.3 58.1
2017 2018 1H2019
Average deal value (US$mn)
Domestic Inbound
48.1%
36.1%
46.1% 49.4%
11.9%
43.4%
32.5%
51.7%
63.8%
53.7% 50.4%
87.5%
56.0%
67.5%
0.2% 0.1% 0.2% 0.2% 0.5% 0.7% 0.0%
2013 2014 2015 2016 2017 2018 1H2019
Domestic Inbound Outbound

3.2 Inbound M&A
3.3 Domestic M&A
4.4 Outbound M&A

Inbound M&A slowed down during 2018 – 1H2019
Source: FiinGroup
Figure 10: Inbound M&A (US$mn) in Vietnam, 2013 - 1H2019
YEAR Acquiror Nation of
acquiror
Target DEAL VALUE
(US$mn)
2018 GIC Pte Ltd. Singapore Vinhomes 1,300
2019 SK Investment Vina II Pte. Ltd South Korea Vingroup 1,009
2018 SK Investment Vina II Pte. Ltd South Korea Masan Group 472
2018
Hanwha Vietnam Opportunity
Private Fund 1
South Korea Vingroup 400
2018 Warburg Pincus LLC U.S. Techcombank 370
2018 Alp Asia Finance Vietnam Ltd Hong Kong Asia Commercial Bank 220
2019 Fitness & Lifestyle Group Pty Ltd Australia CMG Asia 200
Figure 11: Top 8 Inbound M&A Deals, 2018 – 1H2019
Source: FiinGroup
INBOUND M&A
2011 - 1H2019
US$38.06bn
756 Deals
Accumulated inbound M&A deal value into Vietnam since 2011 reached US$38.06bn from 756
transactions. After a record year in 2017 with 148 inbound deals, the inbound market contracted
significantly in 2018 with only 82 deals. In terms of value, inbound deals in 2018 registered US$4.2bn,
decreasing by 37% y-o-y compared to inbound value in 2017 without the mega SABECO deal.
Particularly, medium value deals become predominant as foreign investors tend to acquire minority
stakes. As a result, inbound deals only accounted for 57% of total M&A transaction value in 2018,
compared to a staggering 88% in 2017. Real estate, banks, and industrial goods & services were the key
inbound sectors in 2018, driven by significant investments in Vinhomes, Vingroup and Masan Group.
The inbound market remains quiet during the first half of 2019, but still accounted for 67% of total
M&A value. 1H2019 only recorded US$1.45bn from 25 transactions, a 67% decrease compared to same
period last year. The slowdown of real estate sector, industrial goods & services and healthcare sectors
were the main drivers during 1H2019.
Section 3: 2018-1H2019 M&A in Review | Inbound M&A
Deals with undisclosed buyers are not counted
3,548 3,632
1,794
3,096 3,429
5,134
11,753
4,221
1,453
60 64
71
91
113
102
148
82
25
0
30
60
90
120
150
0
2,800
5,600
8,400
11,200
14,000
2011 2012 2013 2014 2015 2016 2017 2018 1H2019

0 500 1,000 1,500
Singapore
South Korea
United States
Japan
Thailand
Hong Kong
Malaysia
Philippines
Majority stake Minority stake
Inbound M&A in 2018: Singapore led the market in terms of
deals value
Figure 12: Inbound M&A (US$mn) Deal by Country, 2018
Capital inflows for M&A from Singapore reached
US$1.4bn in 2018, accounting for 33% of total
inbound value into Vietnam. As such, Singapore
has replaced Thailand as the leading investors in
Vietnam via M&A. The majority of completed
deals from Singaporean bidders focused in the
real estate sector, contributing over US$1.37bn
in value. The largest deal was the acquisition of
5.74% stake in Vietnam’s leading real estate
development conglomerate Vinhomes by GIC Pte
Ltd valued at US$1.3bn. Other notable deals
include the acquisition of Phu An Khang Real
Estate JSC from Frasers Property Limited for
US$18mn, followed by US$11.4mn investment
from Keppel Land to fully acquire Saigon Sport
City project. Given the high demand for
residential real estate, investment into real
estate sector from Singapore is expected to keep
growing in the upcoming years.
South Korea also emerged in 2018 as an active
investor with over US$1.26bn capital inflows
into Vietnam via M&A transactions, accounting
for nearly 30% of total inbound value. South
Korean investors eyed on various sectors,
including Industrial Goods & Services
(US$920.2mn), Financial Services (US$226.6mn)
and Food & Beverage (US$36.3mn). Highest
value deal was the US$472.5mn acquisition of
10% stake in Masan Group from SK Investment.
In particular, South Korean bidders tend to
acquire reputed and established names to
quickly capture market share in their
respective industries. Within the financial
services sector, consumer finance companies
were highly pursued as South Korean investors
aggressively penetrated this growing market.
Major deals include the 100% acquisition of
Prudential Vietnam Finance from Shinhan Card
for US$151mn and US$74.7mn purchase of 100%
stake in Techcom Finance from Lotte Card.
Since 2018, investors from Singapore and South Korea escalated their investments in Vietnam and dominated
the inbound market in terms of deal value. Meanwhile, despite the highest number of deals, Japanese investors
usually contributed small and medium-sized deals.
Source: FiinGroup
BY TOTAL DEAL VALUE BY NUMBER OF DEALS
INBOUND 2018
US$4.22bn
82 deals
18
14
12
8
6
5
4
3
2
2

0 500 1,000 1,500
South Korea
Australia
Japan
Singapore
Thailand
Hong Kong
United States
United Kingdom
Majority stake Minority stake
Inbound M&A in 1H2019: South Korea strengthened its
presence in Vietnam with over US$1bn capital inflows
Figure 13: Inbound M&A (US$mn) Deal by Country 1H2019
Given the strong momentum in the 2H2018, South
Korean investors continued to solidify their
footholds in Vietnam via M&A transactions.
During 1H2019, capital inflows from South Korea
surpassed US$1bn, a quadruple increase
compared to 1H2018. Following the strategy in
2018, South Korean investors continued to invest
in high-profile names with established market
share. In particular, after the US$472mn
investment in Masan Group, SK Investment spent
another US$1bn to acquire 6% stake in Vingroup -
the giant conglomerate in Vietnam. In fact, from
2018 to 1H2019, South Korean investors have
already poured in over US$1.4bn into Vingroup,
accounting for 25% total inbound deal value
during this period. These investors saw high
potentials from Vietnamese firms as an ideal
strategic partner to accelerate their regional
objectives while benefiting from the promising
growth trajectory.
After an impressive year in 2018, capital
inflows from Singapore decelerated in 1H2019
with only US$60mn from 2 minor deals. As the
real estate sector started to cool off,
Singaporean investors have been shifting to
Food & Beverage and Industrial Goods &
Services sectors, which will gain significant
benefits from the CPTPP and upcoming EVFTA.
Japan remains the most active investor in
terms of volume. Inbound M&A from Japan
totaled US$128.3mn from 10 deals during
1H2019, suffering a 49% decrease from
1H2018. With a conservative investment
strategy, Japanese investors tended to acquire
minority stakes at a small value. The largest
deal was worth US$106.5mn, in which Taisho
purchased additional 20.6 million shares of
Hau Giang Pharmaceutical to lift its stake to
51%.
1H2019 also witnessed the appearance of
Australian investors with the acquisition of
CMG Asia from Fitness and Lifestyle Group,
Australia's most significant gyms business, for
over US$200mn.
Inbound M&A in 1H2019 recorded 25 deals, down from 27 deals in same period last year. In terms of inbound
deals value, 1H2019 only achieved US$1.45bn, a 54% decrease compared to 1H2018. Apart from South Korea,
frequent investors such as Singapore and Thailand have reduced the size of their investments.
Source: FiinGroup
INBOUND 1H2019
US$1.45bn
25 deals
BY TOTAL DEAL VALUE BY NUMBER OF DEALS
10
3
2
2
2
1
1
1
1
1
1

CAPITAL INFLOWS
2011 - 1H2019 via M&A
US$4.57bn
68 Deals
Figure 14: Inbound M&A (US$mn) into Vietnam by South Korean Investors, 2011 – 1H2019
Spotlight: South Korea solidified its presence in Vietnam
Investment waves from South Korea
In light of recent government’s efforts and
blooming economy in Vietnam, South Korean
investors accelerated their investments into
Vietnam via M&A with large-scale acquisitions.
Ever since the 2H2015 when Decree 60 was
imposed to raise the foreign ownership level to
100% and VKFTA was officially signed to reduce
tariff barriers, capital inflows from South Korea
experienced a steep upward trend. In particular,
inbound M&A from South Korea recorded
US$3.5bn in value during 2016-1H2019,
registering an outstanding CAGR of 28.5%.
South Korean companies have primarily invested in
industrial sectors, evidenced by US$2.1bn
investment in Industrial Goods & Services sector
since 2016. Main bidders in this sector were giant
business conglomerates that sought large-scale
deals to acquire high-profile enterprises, namely
Gemadept, Masan Group and Vingroup. This
strategy allowed South Korean giants to rapidly
gain direct access to local markets, enjoy
sustained growth while mitigating risks.
Besides manufacturing, South Korean buyers
also targeted banking and consumer finance
sectors. Given the booming digital finance in
South Korea, these financial investors sought
to quickly capture the robust growth of
Vietnam with the support of technology.
Shinhan Bank pioneered in 2017 with 100%
stake acquisition of ANZ Bank (Retail division)
for US$240mn. Subsequently in 2018,
Shinhan Card and Lotte entered the local
consumer lending market with 100% buyouts of
local finance companies. Considering the
pervasion of South Korean retails, the
appearance of finance companies would
complement existing chains and create a
strong ecosystem in Vietnam. Moreover, as the
South Korean government is tightening the
consumer lending market due to enormous
household debts, South Korean financial
institutions is expected to keep invading into
Vietnam, exploiting the untapped consumer
lending market for over 90 million people.
Recently, a third wave of investments, in
which South Korean’s SMEs take the form of
strategic alliances with local firms, is arriving.
Particularly, South Korean partners will offer
modern technology, while Vietnamese
companies could assist with brand presence
and distribution.
Capital inflows to Vietnam from
South Korea escalated since 2016,
peaked in 2018 and followed by an
outstanding 1H2019.
Source: FiinGroup
533
107
159
43
193
493
734
1,260
1,047
5
4 4
3
6
8
21
14
3
0
5
10
15
20
25
0
300
600
900
1,200
1,500
2011 2012 2013 2014 2015 2016 2017 2018 1H2019
Deal Value (US$mn) Vol (RHS)

CAPITAL INFLOWS
2011 - 1H2019 via M&A
US$5.55bn
85 Deals
Figure 15: Inbound M&A (US$mn) into Vietnam by Singaporean Investors, 2011 – 1H2019
Spotlight: Singapore escalated its investment scale in Vietnam’s
real estate sector
The “Asian Tiger” Singapore remained the most
active cross-border investor in South East Asia.
Singapore remained active in pursuing investment
opportunities in the region via M&A transactions.
Led by GIC Private - the world’s eighth-largest
sovereign wealth fund managing over US$390bn
and numerous PE funds, Singapore possesses
abundant sources of foreign reserves. As such,
Singaporean investors are aggressive in their hunt
for acquisition abroad, especially in emerging
markets like Vietnam.
Since 2011, Singapore has poured over
US$5.55bn into Vietnam via M&A
transactions, concentrating in 2016-2018 period. In
particular, inbound capital inflows from Singapore
spiked up in late 2016 through mega deals in real
estate sector, exploiting the growing property
market. As an emerging market with rapid
urbanization rate, Vietnam offered high-yield
opportunities that were unavailable in developed
countries. The investment wave in real estate was
triggered by US$442.5mn investment from
CapitaLand and Keppel Land in 2017 into
residential properties, followed by the
US1.3bn acquisition of Vinhomes from GIC
Private in 2018. In total, during 2016-1H2019, M&A
transactions in real estate sector contributed
US$2.39bn, accounting for 43% of total
inbound value from Singapore since 2011.
However, as foreign investments into real
estate started to cool off, capital inflows
from Singapore into this sector also
experienced a downward trend in terms of
volume, recording only 5 deals in 2018 and
zero deal in 1H2019. Apart from real
estate, M&A transactions from Singapore
spanned across multiple sectors yet at
insignificant value, including Food &
Beverage (US$20mn) and Travel
(US$18.7mn).
1H2019 was a dormant period for
Singaporean investors, contributing merely
US$39mn from only 2 deals - lowest level
since 2012. The deceleration of investment
capital from Singapore was a strong
reflection of the global slowdown in M&A
activities in 2019, attributed to greater
market volatility and US-China tensions. As
a result, large cross-border deals, even
from market leaders like Singapore almost
disappeared during the first six months of
2019.
Capital inflows to Vietnam from
Singapore surged rapidly since the
2H2016, hit record in 2017 and
remained strong in 2018.
Source: FiinGroup
79 10
595
141
1,049
433
1,794
1,412
39
4
2
13
9
11
15
17
12
2
0
4
8
12
16
20
0
400
800
1,200
1,600
2,000
2011 2012 2013 2014 2015 2016 2017 2018 1H2019

Source: FiinGroup
Figure 16: Inbound M&A Activities (US$mn) by Top Sector
Inbound M&A: Sector Analysis
BY NUMBER OF DEALSBY TOTAL DEAL VALUE
In 2018, inbound deals are highly concentrated as top four sectors attracted over 75% of total
inbound deal value: Real Estate (US$1.4bn), Banks (US$742mn), Food & Beverage (US$584mn) and
Industrial Goods & Services (US$454mn). Capital inflows into real estate sector were attributed to
rapid urbanization with expanding middle class that stimulated the demands for residential
property. Meanwhile, large foreign investments into two leading conglomerates namely Vingroup and
Masan Group drove the industrials goods & services sector. Particularly, considering the upcoming
CPTPP, EVFTA that will reduce tariff barriers and the movements of manufacturers from China,
subsectors such as electronic equipment, heavy construction and transportation services will likely
attract high interests.
1H2019 saw a significant shift in appetite of foreign investors. Real Estate, Banks and Financial
Services contributed only US$15mn, equivalent to merely 1% of total inbound value during this
period. Meanwhile, Industrial Goods & Services sector dominated with over US$1.02bn in just six
months, accounting for 71% of total inbound transaction value.
1,394
742
584
454
238
147
135
120
104
90
69
Real Estate
Banks
Food & Beverage
Industrial Goods & Services
Financial Services
Basic Resources
Utilities
Personal & Household Goods
Construction & Materials
Oil & Gas
Health Care
2018 1H2019
8
3
8
7
8
4
8
9
2
2
4
Real Estate
Banks
Food & Beverage
Financial Services
Basic Resources
Utilities
Oil & Gas
Health Care
2018 1H2019

3.2 Inbound M&A
3.3 Domestic M&A
3.4 Outbound M&A

Domestic M&A 2018: Continued upward trend, but got off a
slow start in 1H2019
2018 Domestic M&A Overview
Accumulated domestic M&A value since 2011
recorded 1,385 deals valuing US$20.94bn.
Remarkably, 2018 witnessed an upward in
domestic M&A scale, recording US$3.26bn from
174 transactions, average deal size of nearly
US$19mn which is significantly improved from
2017’s level of US$14mn. 1H2018 recorded 80
deals at US$1,806mn while 2H2018 saw a more
than double performance, in terms of both deal
value and volume. Half of domestic deal value in
2018 are made of mega deals in Real Estate, and
Construction with active acquirors: Vingroup,
Novaland, and An Quy Hung.
Real estate is the most active sector in 2018,
fueled by the race to collect good land among
active domestic investors like Vingroup or
Novaland. The situation is that "clean" property
spots are getting scarce, while domestic
enterprises are facing fierce competition foreign
capital inflows. Furthermore, the real estate
procedure requires 3 - 5 years to finish and
property-transferring fee is increasing by 30 - 50 %
over the year are additional factors to the surge
of domestic M&A Real Estate market. Taking
advantage of local expertise, domestic players
see the urge of acquiring land areas for future
projects and enhancing their foothold in the
market.
1H2019 Domestic M&A Overview
Domestic M&A activities ended the first half with
a modest performance. Although 1H2019’s deal
volume is comparable to 1H2018’s. total deal
value of US$700mn, equal to less than half of
1H2018’s.
Nam Long Investment Corp’s acquisition of 70%
stake in Dong Nai Waterfront City for US$100mn
was the only one mega-transaction completed by
domestic investors. Overall, domestic M&A value
contributes 33% to the total M&A value in this
period. 1H2019 registered an average deal size of
modestly US$9mn, with 73 out of 81 acquired
deals ranging from less than US$1mn to
US$25mn. However, 63% of total deal value
amounting to US$442mn are constituted by 8
deals larger than US$25mn.
During the first half of 2019, the “ever hot
sector” Real Estate experienced a cooling time
with only US$3.91mn from 5 deals. Recently,
many M&A real estate failed to be executed,
despite achieving agreements with foreign
partners due to problems in the legal evaluation
stage. This originated from inconsistencies in
regulations such as complicated land use rights,
which is regarded as the biggest barrier in M&A
activities in real estate, especially for foreign
investors.
Figure 17: Domestic M&A Total Deal Value (US$mn) & Deal Number, 2011 – 1H2019
Source: FiinGroup
Domestics M&A to
1H2019
US$20.94 bn
1,385 Deals
Section 3: 2018-1H2019 M&A in Review | Domestic M&A
Deals with undisclosed buyers are not counted
2,767
1,225
1,671 1,750
2,947
5,032
1,597
3,255
700
195
104 98
156
261
203
113
174
81
0
60
120
180
240
300
0
1,100
2,200
3,300
4,400
5,500
2011 2012 2013 2014 2015 2016 2017 2018 1H2019

Domestic M&A 2018 - 1H2019: Real Estate dropped,
Construction & Materials, Industrial Goods & Services heat up
Source: Fiingroup
• During the first half of 2019, the “ever hot
sector” Real Estate experienced a cooling
time with only US$3.91mn from 5 deals.
Recently, many M&A real estate failed to be
executed, despite achieving agreements with
foreign partners due to problems in the legal
evaluation stage. This originated from
inconsistencies in regulations such as
complicated land use rights, which is regarded
as the biggest barrier in M&A activities in real
estate, especially for foreign investors.
• While Construction & Materials took the whole
year 2018 to achieve 15 deals totaling
US$418mn, it needs only 6 months in 2019 to
reach US$217mn from 13 deals, accounting for
31% of total domestic deal value in 1H2019,
thereby replacing Real Estate to become the
most active sector after within 1H2019.
• Industrial Goods & Services decreased by half
in deal volume and three times in deal
volume, mainly focusing on Transportation
Services, Containers & Packaging, Electronic
Equipment. This can be explained by the
increasing capital flow from Chinese
enterprises as an impact of the US – China
trade war as well as other beneficial Free
Trade Agreement terms.
BY NUMBER OF DEALSBY TOTAL DEAL VALUE
Figure 18: Domestic M&A activities by top sector
Unlike inbound M&A which has a high concentration on the top four sectors, over the past 2 years,
domestic M&A showed fluctuations in both deal value and volume across sectors.
• Real estate is the most active sector in 2018
fueled by the race to collect good land among
active domestic investors like Vingroup or
Novaland. Total real estate deal value was at
US$1.45bn (US$56mn higher than that of
Inbound deals) from 38 deals, 3 of which are
mega deals, 2 from Vingroup & 1 from
Novaland, amounting to US$811, making up
for 56% of domestic M&A in real estate. The
situation is that "clean" property spots are
getting scarce, while domestic enterprises are
facing fierce competition foreign capital
inflows. Furthermore, the real estate
procedures requiring 3 - 5 years to finish and
property-transferring fee increasing by 30 - 50
% over the year are additional factors to the
surge of domestic M&A Real Estate market.
Taking advantage of local expertise, domestic
players see the urge of acquiring land areas
for future projects and enhancing their
foothold in the market.
• Construction & Materials is the 2nd largest
sector recording US$418mn from 15 deals with
stable domestic investments throughout the
year. The 58% acquisition of Vinaconex Corp
by An Quy Hung LLC at US$316.5mn makes up
for 76% of the sector-wide deal value.
1,450
418
347
213
178
153
95
91
81
229
Real Estate
Food & Beverage
Banks
Chemicals
Financial Services
Utilities
Others
2018 1H2019
32
15
38
13
1
7
9
5
14
40
Real Estate
Food & Beverage
Banks
Chemicals
Financial Services
Utilities
Others
2018 1H2019

Domestic Spotlight: Construction & Materials heat back to the
race
Source: FiinGroup
Figure 19: Domestic M&A Deal Value (US$mn) & Deal Number in Construction & Materials
Construction & Materials ended 1H2019 as the most dominant sector among Domestic M&A activities with
13 deals totaling US$217mn, constituting 31.43% of total domestic M&A deal value – highest
figures since 2011. The average deal size was also very impressive at US$16.7mn.
Construction & Materials seems not to be an attractive sector for M&A ever since it was first recorded in
2011, with the proportion of the total domestic deal value never passing 10%. Especially, 2017 witnessed
the sector’s lowest point of deal value, volume, and contribution to total domestic deal value of
US$30mn, 9 and 1.86% respectively. However, 2018 saw the Construction & Materials deal value rocke by
15 times with deal number almost doubled, compared to those of 2017. This upward trend continued
throughout 1H2019, but mainly on the domestic side as the same figure of Inbound deal value is 10 times
lower.
This surge of Construction & Materials resulted from the active Real Estate sector with M&A value (worth
US$1,311mn in 2018). High demand from the property market raised the demand for Building Materials,
Fixtures and Heavy Construction (in which the domestic investment flow mainly focuses on). 1H2019
Construction & Materials recorded only one mega-deal of 58% acquisition of Vinaconex Corp by An Quy
Hung valuing at US$317mn, besides the transaction of Vingroup-Thai Son Investment at US$78mn and
other 13 deals of being less than US$20mn.
In 1H2019, Vinaconex Corp has successfully divested its state capital after its first attempt failed in
2018, thereby welcoming three new major shareholders Star Invest LLC, An Quy Hung LLC & Cuong Vu
Real Estate LLC owning 8%, 58%, 21% for US$36.45mn, US$317mn and US$85.4mn,respectively .
231
115
38
118
212
108
30
418
217
26
18
16
28
47
24
9
15
13
0
15
30
45
60
0
100
200
300
400
500
2011 2012 2013 2014 2015 2016 2017 2018 1H2019
31.4%31.4%1.9%2.5%7.6%6.9%2.3%9.3%8.3%
Contribution to total domestic M&A value

3.2 Inbound M&A
3.3 Domestic M&A
3.4 Outbound M&A

Source: FiinGroup
Figure 20: Outbound M&A Activities (US$mn) 2011-1H2019 by Vietnam Domiciled Enterprises
Outbound: Vietnamese key tech players ‘footprints in the US
Outbound M&A by Vietnamese companies remains
insignificant, in both deal number & deal value
Outbound M&A, since recorded, has been much less
significant than Inbound and Domestic M&A during
2011 – H12019. Specifically, Outbound M&A peaked
in 2012 with US$274.6mn from only 3 deals, and
then plunged over the next 3 years. However, from
2017 onwards, overseas investment showed
prospects with 1 deal each year. Noticeably, 2018
and 1H2019 witnessed the significant capital
outflows from Vietnamese technological giants.
Noticeable deals in 2018 & 1H2019
In July 2018, FPT acquired 90% stake of the US-
based technological consulting company Intellinet
at an initial deal payment of US$30mn for total
estimated deal value of nearly US$50mn. This is
FPT’s strategic move in its ambition to provide
comprehensive digital transformation services to
enterprises, and boost operations in the US market.
The acquisition of Intellinet is expected to raise
FPT’s revenue in U.S market from US$65mn to
US$100mn after one year. It is forecasted that in
the next 3 years, FPT's US revenue may double.
Currently, the US is FPT's second-largest processing
market after Japan.
One year later, in July 2019 (*), FPT has announced
the strategic investment in Homa Techs Inc., with
specific figures notified later. This acquisition sets
FPT’s first foot in joining the Asia’s smart home
market which is worth US23,078mn.
CAPITAL OUTFLOWS
2011 - 1H2019 via M&A
US$431mn
16 Deals
1H2019 welcomed an outbound deal when
Yeah1 acquired 100% of ScaleLab, #1 fastest-
growing media company by Yeah1 at US$20mn.
400mn-subscriber ScaleLab is expected to raise
Yeah1 monthly Youtube views to 6.9bn and
subscribers to 610mn throughout the world. This
follows Yeah1’s strategic plan to go global.
However, 2 months later, ScaleLab was sold
back to its original CEO at US$12mn. This is
followed by an incident when Youtube accused
SpringMe - a Yeah1 subsidiary – of violating
Youtube policies in selecting and managing
channels & videos, resulting in Youtube
terminating its Content Hosting Agreement
(CHSA) with Yeah1 & its subsidiaries. Following
that, Yeah1 & its subsidiaries cannot make any
earnings from third-party businesses’
advertisement on their channels.As further
negotiations with Youtube did not work, Yeah1
had to sell off ScaleLab to protect Yeah1’s
capital investment and preserve the investors’
interest.
Prospects for 2H2019
Technology continues to witness huge capital
outflows when Vietnamese technological giants
are expanding their influence in advanced
markets such as the U.S, Japan, etc.,
Also, the energy sector, with policies
encouraging investments is expected to see
oversea expansion of large corporations such as
Hoang Anh Gia Lai, Thanh Thanh Cong, etc.,
Section 3: 2018-1H2019 M&A in Review | Outbound M&A
0
275
7 5 12 22
61 50
0
0
3
1
4
1
4
2
1
0 0
1
2
3
4
5
0
60
120
180
240
300
2011 2012 2013 2014 2015 2016 2017 2018 1H2019
(*) excluded from the chart of outbound M&A activities as this deal happened in July 2019-
not belonging to the reviewed period

Vietnam M&A 2019 Research Report| Issue 9 | August 2019
Section 4: Sector Review
4.1 Real Estate
4.2 Industrial Goods & Services
4.3 Food and Beverages
4.4 Banks
4.5
Emerging Sectors for M&A: Health care, Education &
Utilities

Source: FiinGroup
• Notwithstanding interests from multiple
foreign investors, Real Estate sector is
highly concentrated. Particularly, top four
bidders accounted for 76% of total real
estate inbound value during 2011-1H2019:
Singapore (US$2.3bn), Hong Kong
(US$2.1bn), South Korea (US$934mn) and
Japan (US$827mn), with diverse appetites
and investment scales. Specifically,
Singaporean investors eyed the residential
segment with the intense penetration of
Keppel Land and CapitaLand, altogether
adding nearly 30 large-scale projects over a
five-year span. Meanwhile, South Korean
investors, led by Lotte Group, aimed at
commercial properties to provide office and
retail spaces for South Korean firms, along
with housing for expatriates. Notable
transactions was the acquisition of
Landmark 72 Tower by Mirae in 2016.
• With the imminent arrival of manufacturers
relocating from China due to the trade war,
industrial real estate is expected to heat up
in 2H2019 and attracted more foreign
interest.
• Real Estate sector has always been the main
contributor for inbound M&A in Vietnam, driven
by high demand for all real estate segments. From
2011 to 2018, the sector attracted over
US$8.29bn from inbound deals, registering
an outstanding 37% CAGR and accounting for
22% of the total inbound value. Nonetheless, as
the sector started to attract rising interests from
the domestic market, foreign investments into
real estate plunged in terms of both deal volume
and value. In 2018, the sector only recorded
USS$1.4bn from 8 deals, lowest volume since
2012. Apart from the US$1.3bn megadeal of GIC
Private to acquire Vinhomes, the market did not
witness any other large-scale transactions that
exceeded US$50mn. The market remained
inactive in 1H2019 as no inbound transactions
occurred.
• Despite a slowdown in 2018 and 1H2019, Real
Estate sector still posted huge opportunities with
solid growth trajectory, driven by the following
factors: (i) rapid urbanization rate; (ii) growing
middle-class with rising disposable income; and
(iii) increased demands for industrial real estate
amid US-China trade war.
Figure 21: Inbound M&A Activities (US$mn) in Real Estate, 2011 – 1H2019
Inbound Real Estate transactions posted strong growth during
2011-2018 but decelerated in 1H2019
Section 4: Sector Review | Real Estate
INBOUND M&A IN
REAL ESTATE
2011 - 1H2019
US$8.29bn
94 Deals
151 103
598
763
1,636
823
2,817
1,394
0
1
2
11
18 18
12
24
8
0 0
6
12
18
24
30
0
700
1,400
2,100
2,800
3,500
2011 2012 2013 2014 2015 2016 2017 2018 1H2019

Singaporean investors dominated major inbound real estate
deals
Date
4/2018
Size (US$ mn)
1,300
Acquired stake
5.7%
Acquirer
• GIC Private Limited, a Singapore sovereign wealth fund, purchased
ordinary shares and extended debt instrument for Vinhomes at
combined value of US$1.3bn, including US$850 million for 5.74% stake.
The deal expanded GIC’s portfolio in Vietnam, which already owned
stakes of large companies such as Vinamilk, Vietcombank and Masan.
Target
Date
5/2018
Acquirer
• Singapore-based Frasers Property acquired 75% of the issued share
capital of Phu An Khang Real Estate JSC, a wholly-owned subsidiary of
Tran Thai Group. The US$18mn acquisition allowed Frasers Property to
participate in residential-cum-commercial projects in HCMC.
Target
Size (US$ mn)
18
Acquired stake
75%
Acquirer
• In early April 2018, VinaCapital Vietnam Opportunity Fund (VOF) made
a US$21mn private equity investment to purchase 12% stake in
Cenland, one of Vietnam’s leading real estate brokerages. The deal
helped VOF jump in a growing market with unexploited potentials.
Target
Date
4/2018
Size (US$ mn)
10
Acquired stake
12%
Acquirer
• In March 2018, Keppel Land acquired the remaining 10% stake in Saigon
Sport City project for US$11.4mn. After the acquisition, Keppel Land
has consolidated full ownership of the prime township, solidifying its
presence in Vietnam.
Target
Date
3/2018
Size (US$ mn)
11.4
Acquired stake
10%

Source: FiinGroup
• However, 2018 witnessed a strong rebound
with 32 deals valued at US$1.45bn,
recording an impressive 187% y-o-y
growth. Amid the upcoming tightening
policies relating to granting land use rights
and lending for real estate projects, large
real estate developers intensively acquired
smaller companies, who already owned
approved real estate projects with
favourable locations and can be put into
immediate use. This strategy would allow
acquirers to shorten the idle time and
reduce capital expenditures, thus
enhancing market advantage with lowered
product costs. The most active acquirers
were Vingroup and Novaland, who
respectively spent US$922mn and US$365mn
to capture majority stakes of real estate
developers and projects, notably including
Berjaya Financial Centre and International
University Town. These acquisitions
provided Vingroup and Novaland with solid
foundation prior to a strict real estate
market in 2019.
• Compared to inbound transactions, domestic M&A
deals within the Real Estate sector occurred at
much higher volume with total 192 deals. In
terms of value, domestic M&A mainly comprised
of small-scale transactions, yielding only
US$7.34bn during 2011-1H2019. Despite
that, Real Estate sector remained the key driver
for domestic M&A, accounting for 36% of total
domestic value during 2011-1H2019.
• The market stayed stable during 2013-2015, then
abruptly skyrocketed in 2016 to surpass US$2.9bn.
The sudden rise could be explained by the
conclusion of 30,000bn VND credit package, which
prompted real estate developers to rapidly
expand and accelerate their investments. The
ending of disbursement package significantly
reduced the demand for residential housings in
2017, causing developers to reduce their
investment scale to the lowest level since 2012.
Figure 22: Domestic M&A Activities (US$mn) in Real Estate, 2011 – 1H2019
Domestic Real Estate transactions occurred at high volumes
but lower deal value
DOMESTIC M&A IN
REAL ESTATE
2012 - 1H2019
US$7.5bn
192 Deals
0 2
798 826 783
2,970
681
1,450
4
0 1
21
40
32
43
18
32
5
0
12
24
36
48
60
0
600
1,200
1,800
2,400
3,000
2011 2012 2013 2014 2015 2016 2017 2018 1H2019

Vingroup and Novaland actively increased their land banks via
M&A
Date
12/2018
Size (US$ mn)
69
Acquired stake
100%
Acquirer
• Novaland completed the acquisition of 100% of Thinh Vuong Real
Estate JSC with a consideration of US$69mn. The purchase allowed
Novaland to control other real estate subsidiaries of Thinh Vuong,
increasing its land banks and projects.
Target
Date
8/2018
Acquirer
• Along with the acquisition of Thinh Vuong, Novaland also purchased
Dinh Phat Real Estate JSC with a consideration of US$152mn, which
strengthened its portfolio prior to a tightened real estate market in
2019.
Target
Size (US$ mn)
152
Acquired stake
100%
Acquirer
• In August 2018, Vingroup completed the USS$506mn purchase of 98%
stake in Berjaya Vietnam International University Township. The
acquisition aimed to accelerate the long-delayed project in HCMC.
Target
Date
8/2018
Size (US$ mn)
506
Acquired stake
67.5%
Acquirer
• Prior to the acquisition of Vietnam International University
Township, Vingroup contributed approximately US$86mn to own
67.5% stake in Berjaya Vietnam Financial Center limited. Through
this deal, Vingroup will develop a project comprised of an office
building, a five-star hotel, serviced residences, and a shopping mall
on a 6.6ha land plot in HCMC.
Target
Date
3/2018
Size (US$ mn)
86
Acquired stake
67.5%
Dinh Phat Real Estate
Joint Stock Company
Thinh Vuong Real
Estate Joint Stock
Company

Outlook for Real Estate sector in 2H2019
• 1H2019 turned out to be a quiet period with only 5 small-scale deals for both domestic and
inbound markets. In particular, the domestic real estate market were less vibrant due to the
issuance of new lending policies by SBV and tightened grant of land use rights.
• In order to reduce non-performing loans and limit lending for high-risk sectors,
including real estate, Circular 19/2017/TT-NHNN lowered the maximum ratio of
short-term funds for long-term loans from 45% to 40%. In addition, Circular 19 also
raised the risk coefficient of real estate loans from 150% to 200%, discouraging capital
inflows into real estate sector.
• Circular 37/2018/TT-BTC imposed tightened regulations on the management and
disposition of public real estate.
• Directive 11/CT-TTg, which provided solutions to foster a stable real estate market,
required competent authorities to issue regulations for condotel market.
Implication
• In 2H2019, the pipeline supply is expected to decrease in light of restrictions in
downtown area, slow licensing process from HCMC and strict scrutiny for
divestment of SOE’s real estate.
• Nonetheless, long-term outlook remains optimistic with strong fundamental,
fueled by high urbanization rate of nearly 40% and steady population growth of
2% per annum. Further, given the improved infrastructure with newly built
highways, residential projects expanded further away to suburban areas, posing
huge opportunities for real estate M&A activities outside of HCMC and Hanoi.
Residential
sector
• On the other hand, commercial sector is expecting a boost in 2H2019. In
particular, aligned with the upcoming investment inflows into Vietnam thanks
to FTAs and relocation of manufacturers from China. Thus, industrial real
estate including warehouses, factories and industrial parks will attract high
interest from foreign players, who provide alternative capital sources amid
tightened credit policies.
• In addition, the office sector emerges as a potential driver for M&A activities.
The appearance of flexible workspace, which registered 109% y-o-y growth in
terms of leasing area, provided a new wave of supply for the sector. Looking
forward, office supply volume during 2019-2021 is expected to escalate, driven
by solid expansions of IT/Tech sectors and persistent growth of flexible
workspace.
Commercial
sector

4.1 Real Estate
4.4 Banks
4.5
Utilities

Source: FiinGroup
• The sector maintained strong momentum
into 2018 as foreign investors keep eyeing on
the rising logistics sector of Vietnam. Given
the fast-growing economy along with
upcoming movements of manufacturers from
China, Vietnam is expected to become a
logistic hub. Notable deal was the US$47mn
transaction of Mirae Financial Group to
acquire the logistics centers in Yen Phong
Industrial Park.
• The sector is expected to be active in 2019
amid the signings of new FTAs, which
stimulate processing and manufacturing
industry and thus boost demand for logistics
sector. Particularly, investors started to look
into emerging subsectors, evidenced by the
investment of Ryobi Holdings into Amerasian
Shipping Logistics to develop cold chain in
Vietnam.
• Industrial goods & services has always been an
active sector for inbound M&A activities in
Vietnam, driven by high demand for transportation
and logistics services. The sector started to gain
attention from foreign investors since 2013. In
particular, during 2013-2016, industrial goods &
services contributed 55 deals, which were mainly
small and medium-scale deals. As such, the sector
during 2013-2016 only recorded a modest
US$304mn in terms of deals value.
• Yet, the sector experienced a steep upward trend
during 2017-1H2019, thanks to improved
infrastructure and rising export/import activities
that lured in foreign investment into logistics.
Despite a reduction in deals volume, this period
witnessed the surge of mega deals. Specifically,
industrial goods & services sector attracted over
US$1.99bn from inbound investors during
2017-1H2019, registering an impressive 25.6%
CAGR. The investment wave was triggered by the
US$86mn deal of CJ Logistics Corp acquiring 82%
stake in Gemadept, followed by investments into
Dinh Vu and Cat Lai ports of Samarang Ucits -
Samarang Asian Prosperity in late 2017.
Industrial Goods & Services started to attract large-scale
inbound deals since 2017
INBOUND M&A IN
INDUSTRIAL GOODS &
SERVICES
2011 - 1H2019
US$2.36bn
95 Deals
Figure 23: Inbound M&A Activities (US$mn) in industrial goods & Services, 2011 – 1H2019
Section 4: Sector Review | Industrial Goods & Services
0
55 24 55
178
48
518
454
1,026
0
5 5
11
21
18
21
7 7
0
5
10
15
20
25
0
250
500
750
1,000
1,250
2011 2012 2013 2014 2015 2016 2017 2018 1H2019

Foreign investors escalated their investments into logistics
sector
Date
5/2019
Acquirer
• In May 2019, the Japanese transportation company Ryobi Holdings
acquired 35% stake of Amerasian Shipping Logistics, a freight forwarding
and logistic company for an undisclosed amount. The investment aimed
to develop the cold chain logistics segment in Vietnam.
Target
Size (US$ mn)
Undisclosed
Acquired stake
35%
Acquirer
• In March 2019, the Taiwanese marine transportation company Wan Hai
Lines LTD purchased over 19 million shares of Da Nang Port for
US$17mn. After the deal, Wan Hai Lines raised its stake in Da Nang
Port to 20%, solidifying its ownership in the growing logistics company
Target
Date
3/2019
Size (US$ mn)
17
Acquired stake
20%
Acquirer
• In October 2018, the joint venture between Mirae Asset and Naver Asia
Growth Fund spent US$47mn to acquire two logistic centers in Yen
Phong Industrial Park. The deal allowed the joint venture to expand its
portfolio and enter the flourishing logistic sector in Vietnam.
Target
Date
10/2018
Size (US$ mn)
47
Acquired stake
100%
Yen Phong
Industrial Park
Section 4: Sector Review | Industrial Goods & Services

Source: FiinGroup
Figure 24: Total M&A Deal Value (US$mn) & Deal Number, Food & Beverage
Food & Beverage (F&B) has always been a
“magnet” for M&A thanks to the sector’s high and
stable growth rate, driven by Vietnam’s population
size of almost 100mn people, rapid urbanisation,
emerging middle class, and resilient GDP growth.
From 2011 to H12019, 245 deals with the total
value of US$12.5bn have been recorded, led by
“big men” in the industry such as Masan, Kido, and
Pan Group.
Nevertheless, 2018 and 1H2019 witnessed the cool-
off of M&A activities in the F&B sector, mostly due
to the slump in Inbound M&A. 2018 recorded 21
M&A cases valued at US$798mn, equivalent to just
66% of deal volume and 13% of deal value noted in
2017. Deal making in F&B in 1H2019 maintained
this stable and steady trend.
The main reason for the sudden drop in value is the
absence of blockbuster deals like ThaiiBev and
Sabeco in 2017 or Singha-Masan in 2016. During this
period, there were only small and mid-sized deals.
The average values of M&A deals were US$16.5mn
in 2018, and US$19.75mn in 1H2019. As a result,
M&A value in this sector turned to the regular norm
as the period before 2016, but overall, the outlook
for F&B will still be vibrant thanks to uprising of
domestic players and growing domestic demand.
Section 4: Sector Review | Food & Beverage
M&A in F&B went back to regular norm after the inbound fever
Inbound M&A had driven the market during the
period. 2018 inbound M&A plummeted 90% y-o-
y, in line with absence of megadeals like
Sabeco. The downward trend remained in
1H2019. Meanwhile, domestic M&A value
decreased but with a lower degree of 38% in
2018 and started recovering in 1H2019,
achieved 64% of 2018’s value.
Explanations for this could be while
international investors hesitated to invest in
the context of global market uncertainties,
domestic players, being confident about
resilient growth of the sector and the economy,
actively looked for expansion through M&A
transactions. One of the noticeable domestic
M&A deal was the Masan Group, through their
subsidiary Masan Beverage, increased its
ownership of Vinacafe Bien Hoa from 68.5% to
98.5% for US$18mn.
1,242
325
630 870
596
1,612
6,306
798
158
26
21
24
29
52
32 32
21
8
0
12
24
36
48
60
0
1,600
3,200
4,800
6,400
8,000
100
1,310
6,052
584
22
496
303
254
213
136
0 1500 3000 4500 6000 7500
2015
2016
2017
2018
1H2019
Domestic Inbound
Source: FiinGroup

Food & Beverage: Favorable demographic factors to boost
growth
Noticeable F&B deals in 2018 – H12019
1H2019 recorded no megadeals but 2 noticeable
transactions from GTNFOODS and HAGL Agrico.
GTNFOODS which owns 51% of Moc Chau Milk has its
divesture to Vinamilk with 36% valuing at
US$51.5mn. Vinamilk’s bid offer of acquiring 49%
was first rejected by GTNFOODS, given GTNFOODS’
concern of Vinamilk’s monopolistic position in dairy
market. This move of M&A from Vinamilk is a firm
preparation against the dynamic capital flows in
F&B from foreign investors, taking advantage of
Moc Chau Milk’s 60-year tradition & biggest cow
farms in the North
Another attention-gained deal is the 8% acquisition
of HAGL Agrico from THACO valuing at
US$45.5mn. This transaction was conducted, while
HAGL Agrico was put into the black list by HOSE.
THACO will be mainly in charge of restructuring
HAGL Agrico’s liabilities & capitals to expand
agricultural land bank to 30,000 ha.
An interesting case in domestic M&A in 2018 is the
acquisition of Vinacafe Bien Hoa JSC (VCF) by
Masan - the biggest deal with US$74.6mn for 30.4%
stake. Vinacafe sold itself not because of loss, but
because Masan constantly bought shares from its
major shareholders. Acquiring Vinacafe, Masan
obviously becomes the top three key players in
Coffee market.
Factors for Domestic F&B M&A growth
• Increasingly young population rate (45% of
population are under 35 years old, according
to GSO).
• Increasing monthly expenditure on F&B (35%,
according to MOIT report).
• Increasing available source of raw
agricultural materials, acting as an
advantage for F&B companies to focus on
diversifying more organic & healthy product
lines.
Acquiror name Target company/ asset % Stake acquired Type
Deal value
(US$ mn)
2018 Masan Beverage Vincacafe Bien Hoa 98.9% Domestic 75
2018
Bien Hoa Sugar & Thanh
Thanh Cong Tay Ninh Sugar
Công ty Cổ phần Tập đoàn
PAN
100% Domestic 58
2018 Sojitz Corporation Khanh Hoa Sugar 65% Inbound 10
2018 STIC Investment Inc Vocarimex 51% Domestic 42
2019
Công ty Cổ phần Đầu tư
Thành Thành Công
Công ty Cổ phần Đầu tư
Thành Thành Công
7% Domestic 27.81
Dominant trends in F&B
• Organic & Natural F&B. According to Nielsen,
86% of respondents said they have used
organic food/drink at least once.
• New definition of convenience F&B. Due to
the smaller family size & increasing single
rate, F&B giants are concentrating on
providing “Ready meals” – not just processed
meat or noodles, but fresh and nutritious
foods.
• Technology-based F&B providers. As young
population are more tech-savvy, F&B
companies are taking advantage of online
delivery platforms; or in other words, are
bringing their products “online”.
Figure 25: Noticeable F&B deals in 2018 – H12019
Section 4: Sector Review | Food & Beverage

Foreign strategic investors gradually exited due to minority
share constraints and Foreign Ownership Limit
After the booming period, M&A in banking has been very quiet throughout 2H2018 to 1H2019. By
1H2019, there remains 45 commercial banks in total – 4 SOCBs, 31 JSCBs, 1 JV and 9 foreign banks. The
government has indicated the commitment to sector consolidation by ceasing granting licenses to new
foreign banks in Vietnam, but instead to encourage strategic investors to take over 100% of zero-VND
banks or to buy shares of existing banks. However, due to reasons regarding FOL and minority shares for
strategic investors, plus the expected expenses in both resolving the existing bad assets and capital
contribution, there have been less M&A activities since 2H2018 to 1H2019.
Source: StoxPlus
Section 4: Sector Review | Banks
Despite high levels of foreign interest in the sector, some banks have hit the FOL limit and have
limited levels of free-float shares.
• Out of the 17 banks that are listed, four banks have hit FOL limit at 30% and 10 banks have above-
20% foreign ownership. Even if foreign investors manage to seize 30% of the banks’ equity, it is not
enough for them to make a strong impact on the market.
• Current shareholders are reluctant to set the high free float rate; the average is only 63%.
These factors are major obstacles to strategic investors, who are looking for sizable impact on banks’
operations and long-term successes, rather than private equity investors looking for financial gains.
• These elements were cited as reasons for the lack of M&A activities in 2018 as well as the exits of
Société Générale, BNP Paribas, and HSBC from Vietnamese commercial banks SeABank, OCB, and
TCB respectively.
• While the Prime Minister has mentioned a possible raising of FOL, no clear direction for banks have
been issued as of the writing date.
Figure 27: Recent Divestments in the Banking Sector
M&A IN BANKING
2011 - 1H2019
US$5.32bn
56 Deals
Target Seller Stake Seller’s nation Status Time
OCB BNP Paribas 19% France Completed Jan 2018
ACB Standard Chartered 15% UK Completed Jan 2018
SeABank Société Générale 20% France Completed Mar 2019
Figure 26: Total M&A Deal Value (US$mn) & Deal Number, Banking
Source: FiinGroup
1,562
1,135
246
119
834
18
482
928
0
10
8
9
3
8
1
11
6
0 0
3
6
9
12
15
0
400
800
1,200
1,600
2,000
2011 2012 2013 2014 2015 2016 2017 2018 1H2019

Banking M&A is getting warmer amid the return of mega deals
Section 4: Sector Review | Banks
KEB Hanna Bank-BIDV closed the highest value M&A deal in the history of banking industry
• On July 22, BIDV announced the highest value M&A deal in the history of Vietnam's banking
industry, selling to its strategic foreign partner KEB Hana Bank (Korea) a total of more than 603
million shares, equivalent to 15% of the charter for US$865bn.
• Following the deal, state ownership will reduce from 95.28% to 80.99%. The increase in charter
capital is part of BIDV’s plan to comply with Basel II. Moreover, by doing this, the bank might
improve its credit ratings and become more competitive in domestic and international markets.
Prospect from continuing state divestment from big banks
Recent approved investments set mega-deals to come back soon
• SBV approved the principle agreement for HD Bank to acquire 100% of PGDBank. HDBank’s charter
capital is expected to reach US$676mn. After this transaction, HDBank’s coverage across 63 cities
and provinces will be effectively strengthened.
• The deal Vietcombank (VCB) selling 3% stake to GIC (Singapore) & Mizuho Bank (Japan) was
approved by December 2018. With this deal, Vietcombank became the first state-owned
commercial bank to raise its capital last year. However, the actual capital was still low, compared
to the necessary amount of capital under Basel II.
• After successfully selling 3% of capital to foreign investors last year, VCB proceeded the plan of
selling 6.5% of shares from now until 2020. Mr. Vo Viet Hung , Head of VCB's Capital Raising
Department said that the roadmap for selling 6.5% of shares had been approved by the bank and
waiting for approvals of the SBV as well as related line ministries.
• According to industry experts, GIC - investment fund of the Singapore Government continue to
show its interest in participating in the next fund-raising rounds of the most profitable bank in
Vietnam.
Hope from sales of “Zero Dong” banks…
• During the recent meeting with Korean banks, Deputy Prime Minister Vuong Dinh Hue affirmed
the Government was focusing on restructuring the financial and banking systems, so from now
until the end of 2020, the Government would not grant licenses to establish foreign-owned
banks. However, foreign investors might consider buying weak banks that are currently
restructured such as OCEAN BANK, GPBank and Construction Bank.
• So far, many foreign investors have revealed their interest in buying these bad banks and
participating in restructuring banks and credit institutions, for instance, J. Trust and Maruhan,
Srisawad Corporation (Thailand), Clermont Group (Singapore).
• Going forward, pressure of raising capital to satisfy Basel II remains a driver for M&A. For small
banks with low CARs, credit growth is limited, unless the levels of capital adequacy approache the
minimum requirement, hence, M&A continue to be a solution for these banks to grow and revive
profitability.
• Besides compliance, banks that are looking to expand their network coverage in line with retail
banking strategies could consider M&A, such as the case of HDBank and PGBank in 1H2018.
• While there has been progress with bad assets resolution under Resolution No 42, there remains
about 3% of the total loans outstanding still classified as bad debt and hidden bad debt, illiquid
and seeking solution. This, in turn, has delayed and complicated the process of valuation for some
banks, as well as required a higher capital contribution from interested buyers. On the other hand,
the challenges would filter and attract only the most financially capable and experienced investors
to Vietnam to sustain the development of the sector
Capital adequacy, bad assets settlement and banks’ valuation will be key drivers for M&A

Vietnam M&A 2019 Research Report| Issue 9 | August 2019
4.1 Real Estate
4.4 Banks
4.4
Utilities

Foreign investors eyes acquisitions in Health Care
Source: FiinGroup
Figure 28: M&A Deal Value (US$mn) & Deal Number 2011-1H2019
Domestic 21%
Inbound 79%
Outbound 0%
Figure 29: M&A Deal Value Proposition,
2011-1H2019
Section 4: Sector Review |Emerging Sectors for M&A
Health care is among one of the most vibrant
sectors for M&A activities over the last
decade, accumulated the value of US$1.3bn
from 80 deals recorded since 2011. Deal
making in this sector mainly focused on
Pharmaceuticals and Medical Equipment,
dominated by inbound inflows accounting for
nearly 80% of the sector-wide M&A value. The
growth momentum has continually been
supported by rapidly increasing
pharmaceutical market which is expected to
exceed US$7bn by 2020. Also, the rapid aging
population and the booming of urban middle-
class stimulate demand for high-quality
healthcare. Meanwhile, government hospitals
being overcrowded create an enormous
opportunity, attracting investment from the
private sectors.
After peaking in 2017, Healthcare M&A then
dropped to only US$102mn with 7 deals in
2018, aligned with the overall cooling-down in
value of the Vietnamese and global M&A
markets under global economic uncertainties.
Even so, Healthcare ended the first half of
2019 being the 2nd most active sector with 8
deals signed, valued at US$325mn – promising
to make a new record by the year-end.
▪ Fitness & Lifestyle Group Pty Ltd (FLG)
acquired 100% CMG Asia stake for US$200mn.
The investment is a part of the plan by
Quadrant Private Equity (FLG’ owner) to
expand their business, particularly in Asia, as
it prepares the overall company for sale.
▪ Taisho Pharmaceutical Holdings successfully
possessed the controlling interest in Hau Giang
Pharmaceuticals (DHG) - the biggest
pharmaceutical retailer in Vietnam - by raising
its stake from 35% to 51% at US$106.48.
Taisho’s ambition to acquire DHG has been a
long-term process since 2016 as they
continuously bought additional stakes from
various major stakeholders.
Noticeable deals in 2018-1H2019
Source: FiinGroup
118
14
105
15 32
127
466
102
325
10
8
6 6
10
12
13
7
8
0
3
6
9
12
15
0
120
240
360
480
600
2011 2012 2013 2014 2015 2016 2017 2018 1H2019
HEALTH CARE

Regulations & SOE divestments to boost M&A in Health Care
Section 4: Sector Review | Emerging Sectors for M&A
▪ Decision 60/2015/NĐ-CP, together with other Dispatches empowered self-determination for
public listed enterprises to remove the 49% cap on foreign capital, adding more “room” for
foreign investors. Inbound M&A is expected to increase further if the official elimination of the
49% cap proposed in the new Securities Law is approved by the end of this year.
▪ Current policies tend to prevent inbound M&A deals to take the controlling interest of local
enterprises, whereas providing preferential treatments for domestic pharmaceutical materials
and products. In particular, the amended Pharmaceutical Law emphasised prioritising local
firms in bidding activities. Meanwhile, the Decree No. 54 (taking effect from Jan and July
2017) forced foreign investors seeking to do business in distribution of drugs and medicinal
materials to cooperate with local firms or to invest in existing local businesses (as FDI
enterprises having from 51% foreign investment are prohibited to directly related to medicines
transportation and preservation). In other words, regulations aim at “stimulating ” foreign
investments into local institutions
▪ Nevertheless, Vietnam actively participating in the global market through a series of FTAs,
many foreign investors like Taisho Pharmaceutical Holdings chose to hold just a little less than
51% local firm’s stake and wait for a more open policy in the near future.
▪ Another key factor which will strengthen the upward trend of M&A in the pharmaceutical
sector is the State Capital Investment Corporation (SCIC) planning to divest from many
pharmaceutical enterprises including notable brands such as Traphaco, Domesco Dong Thap,
and Ho Chi Minh City Medical Technical Equipment JSC.
▪ Imexpharm (IMP) and Traphaco (TRA) are considered to be the next targets for inbound
Healthcare M&A, given that their up-to-now foreign major stakeholders are holding 47.8% and
47.1% respectively. In case of TRA, the Korean investors Daewon & Mirae Asset who are holding
15% and 25% TRA stake respectively from the deal with Mekong Capital & other private
shareholders last year, are still keen on occupying more stakes of the company this year.
Awaited upcoming deals
M&A activities over the medium term in Health care continues to be pushed by existing
supportive factors. Furthermore, recent regulatory changes have brought out positive
effects, encouraging the participation of foreign players with minority interest, while left
some space for domestic players to grow.
HEALTH CARE

M&A in education has become more active than ever amid
tightening conditions for private institution establishment
Figure 30: Education M&A Deal Volume, 2011-1H2019
Source: FiinGroup
Section 4: Sector Review | Emerging Sectors for M&A
Therefore, acquiring existing universities and colleges has become a more practical choice for new players,
making M&A in this field become more vibrant than ever.
• 2017 witnessed a peak of M&A activities with 6 deals, of which one mega-deal came from TPG
Capital LP acquiring Vietnam Australia International School (VAS) at US$125mn.
• The most remarkable deal out of the 3 deals signed in 2018 was the acquisition of Hoa Sen
University (HSU) by Nguyen Hoang Educational Group (NHG). Although the deal value was not
disclosed, owning 51% of HSU, NHG officially possesses four universities nationwide..
• Meanwhile, the 100% acquisition of Thanh Thanh Cong Education (TTCE) by Navis Capital Partners
(NCP) marked the exciting start for Education M&A in 2019. While TTCE is a prestige private high-
quality educational provider in Southern Vietnam, NCP is a 5-billion USD equity fund taking its
first step in the Education sector in Vietnam.
M&A
EDUCATION&TRAINING
2011 - 1H2019
19 Deals
• Decision No.64/2013/QD-TTg raised the minimum charter capital for establishing non-public higher
education institutions from VND 50 (US$2mn) to VND250bn (US$12mn)
• Under the Decree 46/2017/ND-CP which took effect on 21 April 2017, institutions requesting to
establish a non-public higher education organisation must ensure the minimum capital of VND1,000
bn (exclusive of the value of land used for construction).
• Under Decision No 37/2013/QD/Ttg approving the revised master plan on the university and college
network during 2006-2020, Prime Minister asked not to establish new universities or colleges in
Hanoi and Ho Chi Minh City until 2020.
Private Investors have turned interest to education especially private higher education. M&A instead of new
investments or JV have been preferred since the government issued tightening regulations on new establishments of
private higher education institutions since 2013.
0 0 0
1 1
2
4
1
00 0 0 0
1
3
2 2 2
0
1
2
3
4
5
2011 2012 2013 2014 2015 2016 2017 2018 1H2019
Domestic Inbound
EDUCATION

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