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Vietnam M&A Spotlight - January 2023

Freshfields' Vietnam M&A Spotlight keeps you up-to-date with the key business and legal developments in this sector. Please contact us if you would also like to receive our Vietnam Infrastructure Spotlight, Vietnam Environment Spotlight or Vietnam Competition Law Spotlight.


We are pleased to share the article in Vietnam Investment Review written by Eric Johnson, Counsel of our Hanoi office. Vietnam has seen an astounding increase of activity from foreign venture capital investors over the last five years, and he explains how this supports companies involved in developing Vietnam’s digital economy – a stated priority of the government. Source: Vietnam Investment Review


Sales by the State

  • New Year, Old Resolutions. The Vietnamese Government has set the target of divesting state capital at 141 companies and completing the privatization process at 19 state-owned enterprises (SOEs) by 2025. The move was revealed under a Government decision signed by Deputy Prime Minister Le Minh Khai on the restructuring of SOEs during the 2022-2025 period, aiming at accelerating the divestment and privatization process at state firms that have stagnated due to impacts from the Covid-19 pandemic. Under the decision, the Government plans to keep state holding unchanged at 126 companies, maintain its presence in 195 others, divest state capital in 141, privatize 19, and restructure five. As Vietnam watchers will know well, there have been many such divestment targets set in the past, and much difficulty in meeting them. Source: Hanoi Times


  • Modern-model pharmacies. Leading players in the pharmaceutical retail market, including FPT Retail, An Khang, and Pharmacity, are ramping up expansion efforts, giving birth to the modern pharmacy model. Business opportunities for modern pharmacies are deemed considerable as the proportion of people aged 65 and above in Vietnam will have more than doubled by 2040, accounting for 18 per cent of the total population. This is likely to lead to increased demand and create growth space for retail pharmacies. Source: Vietnam Investment Review


  • Proposed increase in foreign investment to support consolidation in the banking sector. Vietnam seeks more foreign ownership in banks acquiring weaker lenders. The allowed foreign ownership ratio in stronger Vietnamese banks that acquire struggling lenders could jump to 49 per cent, according to a draft government decree. The current cap on foreign ownership is 30 percent, but that could change if the decree drafted by the State Bank of Vietnam is approved. The government has directed Vietnam’s stronger financial institutions to take over weaker ones and DongABank, CB, OceanBank and GPBank have been classified as "weak" lenders in need of restructuring. Source: VN Express International
  • Enough is enough. Foreign investors sold 134 million Eximbank shares, equivalent to 10.8 per cent of the bank's charter capital for VND3,421 billion (US$146 million). The transactions are presumed to have been made between Japan's Sumitomo Mitsui Banking Corporation (SMBC), the bank's major shareholder, and domestic investors. SMBC became a strategic shareholder in Eximbank in 2007, with 15 per cent worth US$225 million. However, the "war of kings" that has occurred between Eximbank's shareholder groups for more than a decade has derailed SMBC's plans. Source: The Investor


  • Hold. Nguyen Hoang Group, a leading educational services provider in Vietnam, has put on hold the sale of a minority stake that could value the private company at around US$1 billion, as bids came short of its expectations. The closely-held company had earlier hired JP Morgan as a financial adviser to find a buyer for the minority stake, estimated 10-20 per cent or so. Source: The Investor
  • Go. KKR-backed EQuest Education Group has acquired a controlling stake in Khoi Nguyen Education Group (KNE), the owner of four international schools in Ho Chi Minh City. A strategic cooperation agreement was signed under which EQuest became the key shareholder and joined the Board of Directors of KNE on 2 December 2022. Source: Vietnam Investment Review


  • Grab more. In the latest development in the competitive field of e-wallets in Vietnam, it is reported that Grab has teamed up with Vietnamese e-wallet ZaloPay to expand the selection of payment options on its super app platform. ZaloPay will work with all of Grab Vietnam's services, including its transportation options and the delivery of food, groceries, and packages. Grab also facilitates cash payments and other cashless options through its e-wallet Moca and linked cards. Source: Vietnam Investment Review

Real Estate

  • Volatile market. Singapore’s APAC Realty has increased its holding in ERA Vietnam to 60 per cent by acquiring another 22 per cent of the Vietnamese real estate agency for almost US$3.7 million. In February 2020, it acquired a 38 per cent stake in ERA Vietnam. The latter is among the top 10 real estate agencies in Vietnam with almost 3,900 salespersons as of the end of 2022. Source: The Investor


  • Fake news. South Korean behemoth SK Group has denied a report that it was seeking the disposal of several assets in Southeast Asia. It was reported that SK was considering the sale of its stake in six companies in Vietnam and one in Malaysia, including a 6.1 per cent stake in Vingroup, a 9.5 per cent in Masan Group, a 14.5 per cent in Pharmacity, a 54 per cent in Imexpharm Corp, a 16.3 per cent in retailer VinCommerce, and a 4.9 per cent in The Crown X in Vietnam. Source: Deal Street Asia
  • Beverages. Swire Coca-Cola Ltd. – a wholly-owned subsidiary of Swire Pacific Ltd. – recently announced the completion of its acquisition of Coca-Cola Beverages Vietnam Ltd. – the Coca-Cola bottling subsidiary in Vietnam. As of the completion of the deal, Swire Coca-Cola now owns and operates three beverage production facilities, 18 production lines and six distribution centres across Vietnam with a direct and indirect workforce of over 3,500 people. Source: Bizhub
  • Coffee. Jollibee Foods Corp, the biggest fast-food operator in the Philippines, is in advanced discussions to sell a minority stake in its Vietnamese coffee chain Highlands Coffee. The group is looking to sell 10-15 per cent of its stake in Highlands Coffee to an investor. Jollibee initially bought a small stake in Highlands Coffee a decade ago and then took a controlling interest. Highlands Coffee, which was established in 1999, began as a coffee products packager in Hanoi and has since grown to become a chain with more than 500 stores in Vietnam and the Philippines. Source: VN Express International


  • US IPO. VinFast, an electric vehicle maker, is considering launching its US initial public offering as soon as the second quarter this year. The unit of conglomerate Vingroup JSC has been working with banks including JPMorgan Chase & Co. and Citigroup Inc. on its listing plans. No final decision has been made on IPO plan and details including timeline could still change. Source: Bloomberg

Oil & Gas

  • Block 12W. Bitexco Energy Ltd. has signed an agreement with Ophir Jaguar 2 Ltd. to acquire the entire stake of Ophir Vietnam in the Block 12W oil and gas exploitation contract, offshore Vietnam. Ophir Vietnam Block 12W B.V is a company incorporated in Netherlands which holds a 31.875 per cent interest in the contract to exploit Block 12W in Nam Con Son Basin. The acquisition is set for completion in the first half of 2023 following necessary regulatory approvals from Vietnamese authorities. Source: The Investor

Renewable Energy

  • Hydropower. TEPCO Renewable Power of Japanese electricity heavyweight TEPCO (TEPCO RP) has acquired a 24.96 per cent interest in Vietnam Power Development JSC, a hydroelectric power company owning and operating three hydropower plants in Vietnam. The acquisition is the second investment TEPCO RP has made in Vietnam following the investment in the Coc San hydropower project in 2018. Source: Vietnam Investment Review