Vietnam Should Tighten Control over M&A Wave
The government of Vietnam needs to take measures to supervise and manage an expanding M&A wave of businesses to curb formation of monopoly on the local market, economists have warned.
Dr. Ngo Hoang Oanh-the Justice Institute said that a supervisory mechanism is necessary and of great significance because transnational groups with powerful finances and expertise will dominate the local market.
How to curb remains an open question to Vietnam’s authorities, Oanh noted.
Asso Prof-Dr Nguyen Nhu Phat, Vice Dean of the State and Law Institute emphasized that Vietnam should focus on building the legal framework allowing competition but being cautious about that.
“M&A wave is unavoidable in the market economy,” Phat said.
Dr Dinh Thi My Loan, Head of Ministry of Trade’s Competition Authority said the ministry is considering forming a mechanism to supervise the concentrated and M&A process in Vietnam.
M&A concept is quite new, and relevant ministries and state bodies should coordinate to build a database on M&A activities, Loan urged.
In 2006, 32 M&A deals valued at US$245 million were conducted in Vietnam up from 18 cases worth US$61 million in 2005.
Japanese Daichi Life Insurer repurchased the entire stake of Bao Minh CMG, becoming the foreign country’s second largest deal, followed by the M&A deal by VinaLand in requiring 70 per cent of the stake of Sofitel Metropole Hanoi.
“M&A deal is the best way to gain the market-share and avoid registering for business license,” a senior official of VinaLand said. (Vietnam Banking Times)
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