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M&A activity to pick up this year: Report
Mergers and acquisitions continued their downward trend last year but the activities are likely to see a revival in 2010, a local investment advisory firm says.
Avalue Vietnam said in a report that M&A deals in the country fell 38 percent last year to US$678.8 million. The figure was much lower than the record of $1.7 billion in 2007.
According to the firm, corporate values of local companies dropped after the VN-Index, Vietnam’s major stock index, fell to 230 points in February last year.
Many of the deals last year were small, valued at less than $5 million each, the firm said in its report.
But with the economic recovery already underway, Avalue is forecasting bright prospects for the local M&A market.
The market will grow together with the economy and local businesses this year, said Dang Xuan Minh, Avalue Vietnam General Director.
Analysts at Avalue said there will be several large M&A deals this year. South Korea’s Kumho Asiana Group has announced plans to sell assets worth a total of $1.1 billion, including those in Vietnam.
Sapporo Holdings Ltd. has said it will enter the Vietnamese market by purchasing a 65 percent stake in Kronenbourg Vietnam Ltd., a joint venture between Carlsberg Brewery A/S and Vietnam National Tobacco Corp. The Japanese beer maker said it will pay about $25.35 million for the stake.
M&A deals involving local companies purchasing other firms or their assets accounted for more than 44 percent of the total market value last year. Avalue said it expects the ratio to increase this year.
thanhnien, TBKTSG
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