The total FDI into ASEAN countries in 2014 hit $136.2 billion, and Vietnam was the best performer among emerging territories in receiving inbound investment, according to the United Nations Conference on Trade and Development.
Companies in Thailand and Japan are both eager to grow outside their home markets, which have witnessed low growth and have mature markets, in contrast to Vietnam’s soaring rate.
Vietnam’s politicians also revised the nation’s laws covering M&As, to make the process quicker and more transparent. A new law enacted in July has cut the time to acquire an investment license to just 15 days, a reduction of about two-thirds of the earlier duration.
A month earlier, the government said that foreigners can now buy majority stakes in certain kinds of listed companies.
Vietnam has also specified 18 industries including consumer, property, transport, construction and manufacturing, where foreign investment is allowed.
Taken together, these measures have laid out a clearer path for companies interested in M&A.
Thai companies have acted more swiftly than their Japanese counterparts in striking M&A deals.
Yoshida said that the reason was slower decision making process in Japan.Thai companies Central Group and TCC Holding expanded their presence in Vietnam’s retail market with the acquisitions of Big C Vietnam, and the Vietnam operations of fashion e-commerce platform Zalora and Metro Cash&Carry.
Another big-ticket deal that involves a Thai corporate buyer is the $1.1 billion transaction to buy majority stake in Masan Group‘s subsidiaries.
Meanwhile, Japanese investors have been active in various sectors, including ANA Holdings‘ strategic investment in Vietnam Airlines, Taisho’s acquisition of over 24 per cent in DHG Pharma, JX Nippon Oil & Energy’s 8 per cent shareholding in Petrolimex — the country’s largest distributor of petroleum products — and AEON‘s purchase of two local retailers.