PwC cited some outstanding M&A cases: Swiss Re purchased 25% of stakes of Vinare (Vietnam Re-insurance Corporation) in January 2008, worth $81.9mil; Kamaz Inc, Russian automobile manufacturer, purchased 12.5% of stakes of VMIC in February 2008 (the Russian partner plans to raise the ownership ratio to 36%); Morgan Stanley purchased 48.33% of stakes of Huong Viet Securities Company.

Another noteworthy affair in February 2008 was that Franklin Resources Inc purchased 49% of stakes of Vietcombank’s fund management company. Berhard, one of the biggest of Malaysia’s banks, purchased 15% of stakes of An Binh bank in March 2008. Additionally, Carlsberg became the strategic partner of Habeco when it purchased 16% of Habeco stakes in May 2008.

According to PwC the value of the affairs made in the first half of the year was lower than in the first half of 2007, but there was one more this year than last year (in H1 2007, there were 47 M&A cases worth $736mil).

Though the value of M&A cases this year is lower than last year, PwC’s experts believe that it is too early to conclude that M&A activities are declining.

Explaining this, PwC said that some affairs have been delayed due to macroeconomic uncertainties, or because parties have wanted to re-negotiate prices. Meanwhile, one or two big affairs would have changed the figures.

PwC’s report about M&A is carried out every six months. The figures released by PwC showed that the value of the M&A cases in H2 2007 was $1.132mil, or nearly double that in H1. Therefore, PwC’s experts have every reason to believe that the value of M&A cases will increase considerably in H2 2008.

PwC believes that there will be more M&A cases in the last six months of the year as some small financial institutions now face difficulties and they may seek foreign capital sources.

In the short term, PwC thinks that M&As in securities firms will become more popular. The companies are facing a lot of difficulties due to the falling stock market.

A lot of general corporations have set up securities companies, and now, facing a lot of difficulties, they have to focus on their main business fields and may have to sell their securities companies to rivals or foreign investors.

Meanwhile, foreign investors really want to jump into some business fields like equitised telecommunications companies and the retail and distribution sector when the country opens the market in 2009.

Construction materials also prove to be an investment field foreign investors are interested in.

PwC believes that with the implementation of its WTO commitments, Vietnam will become an attractive destination for M&A activities in 2008 and coming years. Moreover, the loosening of the regulations on foreign labourers in Vietnam will also serve as an important factor that pushes up M&A activities in Vietnam.

Source: TBKTVN