Vietnam Sees 35 per cent Successful M&A Transactions

Only 35 per cent of M&A transactions have been successful in Vietnam due to the lack of legal framework and knowledge about M&A of local businesses, the Vietnam Television Cable said.

There is still no law for M&A so far because it is quite new in Vietnam.

 

Vietnamese companies now are making M&A based on the legal framework for privatization, issuance and listing, such as the Law on Enterprise 2005, the Investment Law 2005, the Law on Competition 2004 and the Law on Securities 2006.

Local businesses often think that M&A is to join two companies together, said Phan Dang Tuat, head of the Industrial Policy and Strategy Study Institute.

Companies also face difficulties in building procedures for M&A, and evaluating their partners regarding opportunities, risks, financials, position, human resources, vision and goals.

Evaluation of the bought companies is the decisive factor to success, said Nguyen Minh Tuan, deputy head of the Enterprise Development Institute.

 

Low transparency of financial statements, even audited ones, also prevents M&A transactions from succeeding, Tuan said. (VTC)