Sailing through challenges, Unlocking success in Vietnam’s M&A 2024

FiinGroup would like to introduce the publication of Vietnam M&A Report 2024.

In this publication, FiinGroup aims to provide independent analysis supporting our readers, investors, and businesses in gaining insights into the challenges and potential new opportunities. This publication will present our perspectives on the overall M&A environment, the outlook for M&A activities, and promising sectors in 2024 for new investment opportunities.

We hope this publication will provide insights to our esteemed readers after a busy, challenging, and turbulent year. We also look forward to receiving feedback, suggestions, and diverse perspectives to continue fulfilling the mission of “Enlighten the Market” as an independent consulting agency in Vietnam.

Below are the most critical findings in our 10^th issue:

1. In 2023, FiinGroup recorded 220 M&A transactions worth US$5 billion, reflecting a 33% decline from the previous year. M&A activities in Vietnam experienced a decline during 2021-2023, due to global challenges that prompted investors to exercise caution. In particular, the recent depreciation of the Japanese Yen posed a challenge for Japanese investors when they explored new investment opportunities outside Japan. Besides, the economic landscape of South Korea, a heavily trade-reliant country, faced a gloomy economic outlook in 2023.
2. “Inbound” M&A dominated the market, comprising 80.9% of the total deal value in 2023 thanks to the aggressive acquisition from Japan, Singapore, and Malaysia investors. Their goals are to expand their arms to overseas markets after sellers have readjusted their expectations about pricing. Of which, Banks, Real Estate, and Industrial Goods & Services were the Top 3^rd attractive sectors.
3. In 2023, domestic transactions accounted for just 15.8% of the total deal value, marking a significant decrease from the 65% proportion observed in 2022. This decline can be chiefly attributed to the challenging conditions in the macro-economic context, stringent regulations for the real estate market, and high cost for capital mobilization during Q2 – Q4.2023
4. Vietnam M&A market witnessed a downward trend in valuation multiples, decreasing from 16.5x in 2021 to only 11.5x in 2023. In addition, valuation multiples of Vietnam’s stock market are attractive at 11.0x for P/E and 1.7x for P/B, the lowest levels since 2011.
5. Waste & Energy, Banks & Financial Services, and Logistics emerge as promising industries with substantial growth potential, capturing the attention of foreign investors and contributing to a significant number of transactions throughout 2023.
   • Financial services: The financial services sector in Vietnam is expected to remain the double-digit growth in the upcoming time thanks to (i) Low service penetration rate and (ii) favorable demographic factors.
   • Logistics: Vietnam’s logistics industry is expected to witness a 15-20% growth in the upcoming time, which is majorly driven by (i) Strong economic growth, (ii) Rising manufacturing and e-commerce sectors, and (iii) Favorable Government policies
   • ESG: In the Waste and energy sector, ESG (Environmental, Social, and Governance) and Recycling emerge as the most appealing subjects, given the country’s dedication to achieving Net-zero carbon emissions.