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Trade pact sets up stronger M&A interest from Europe

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In strong signals of EU interest in Vietnam over the past few months, a batch of leading companies has signed deals to purchase businesses and expand their merger and acquisition footprint.

Trade pact sets up stronger M&A interest from Europe

Speaking at the Vietnam M&A Forum 2021 earlier this month, Vo Ha Duyen, chairwoman of Vietnam International Law Firm, said, “The EU-Vietnam Free Trade Agreement (EVFTA) is strongly benefiting trade between EU and Vietnam. Therefore we anticipate a boost in cross-border M&As and investments in Vietnam in general.”

Duyen noted that Vietnam has committed to phasing out the economic needs test with respect to retail outlets of foreign-invested enterprises (FIEs) five years after entry into force of the EVFTA.

“Wholly FIEs will be permitted to provide internet services such as data processing,” she said. “Within five years, Vietnamese authorities will favourably consider the proposal by the EU’s financial institutions to allow the total equity held by foreign investors in two joint-stock commercial banks of Vietnam of up to 49 per cent of the charter capital.”

De Heus Group, a leading global supplier of nutritional products for animals, is one such European group that has signed agreements for the purchase of the feed business of Masan Group, which includes ANCO, MNS Feed, and Proconco.

MNS Feed covers 13 animal feed mills and one premix plant, with a total combined production capacity of nearly four million tonnes, strengthening De Heus’ position in Southeast Asia’s largest animal feed market.

Meanwhile, STADA Service Holdings B.V., a subsidiary of German pharma company STADA Arzneimittel AG, has constantly increased its ownership at Vietnamese pharmaceutical firm Pymepharco over recent years. STADA initially teamed up with Pymepharco by transferring technology, allowing the Vietnamese pharmaceutical firm to produce a number of the German company’s branded products. STADA became a strategic shareholder in the Vietnamese company in 2008. In its latest move, STADA has acquired more shares to fully take over Pymepharco.

Meanwhile, Mainstream Renewable Power has acquired an 80 per cent stake in a local company seeking to develop a 400-plus-megawatt portfolio of solar power projects in Vietnam. This deal marks the latest indication of Mainstream’s continued role as an enabler of renewable electrification in Vietnam.

Gabor Fluit, vice chairman of the European Chamber of Commerce in Vietnam, said, “In the past few years, most European investors have funded through disbursement of foreign direct investment into new greenfield projects both in the fields of industry and services. We notice that mergers and acquisitions (M&A) have not been a field of great interest and involvement for European companies historically, but since the EVFTA was ratified, we expect that the market for acquisition of existing assets and/or company shares through M&As will increase in the future.”

According to the Ministry of Planning and Investment, M&A transactions in Vietnam in the last 10 years were mainly carried out by companies from Asian countries such as South Korea, Japan, Thailand, and Singapore. It is expected that Vietnam’s investment environment will improve further when it implements the commitments linked to the various FTAs like the Regional Comprehensive Economic Partnership and others.

Fluit noted that this development facilitates the expansion of export markets and creates a foundation for Vietnamese enterprises to restructure, participate more deeply in the global value chain, and improve competitiveness. This not only helps promote trade growth but also contributes to the flow of foreign investment, including investment through M&A activities into Vietnam.

This attraction will be boosted even further once the EU-Vietnam Investment Protection Agreement enters into force, which will increase the level of trust and confidence in the legal system and framework when European companies want to start and/or expand their business activities in Vietnam, according to Fluit.

This will also give investors greater confidence to invest here and better protection for the capital contributed to the market through an innovative dispute resolution mechanism and other guarantees, such as against expropriation without compensation.

“For that reason, we expect an increased level of interest from European businesses in a number of business segments going forward,” he stressed. “One key sector attracting more European buyers to Vietnam’s M&A market is renewable energy. Besides that, Vietnam will continue to attract interest from investors in agri-business, logistics, fast-moving consumer goods, and other industries and services.”

Source: VIR

Source: https://vietnamnet.vn/en/business/trade-pact-sets-up-stronger-m-a-interest-from-europe-806398.html

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Vietnam targets 7% GDP growth this year: minister

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HANOI — Vietnam is aiming for economic growth of 7% this year, the country’s planning and investment minister said on Monday, higher than an official target of 6.0%-6.5% set previously.

To achieve this, year-on-year economic growth in the third quarter needs to be 9.0% and in the fourth quarter 6.3%, minister Nguyen Chi Dung also said during a government meeting.

Dung said Vietnam’s budget was in surplus, giving scope for fiscal policy to be used to support businesses and residents.

“Credit institutions will need to further cut their lending interest rates to reduce input cost pressure for businesses and for the economy,” he said.

Vietnam, a regional manufacturing hub, started lifting its coronavirus curbs late last year, allowing factories to resume full operations.

The economy is recovering after growing only 2.58% last year, the slowest pace in decades.

The Southeast Asian country reported GDP growth of 7.72% in the second quarter, backed by strong export growth, but warned of upward inflation pressure for the rest of the year. 

Source: https://tuoitrenews.vn/news/business/20220704/vietnam-targets-7-gdp-growth-this-year-minister/67932.html

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Vietnam spends $40bln importing computers, electronic components since early 2022

Computers and electronic components continue to be the lead group of imported goods, with a turnover of approximately $40 billion, according to the latest data from General Department of Customs.

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From the beginning of the year to June 15, the country spent $39.62 billion importing computers, electronic products, and components, an increase of 29.3% from a year ago.

Computers, electronic products, and components remain the largest import item of Vietnam, accounting for 23.36% of the total import turnover of the economy.

The second-largest imported goods were machinery, equipment, tools, and spare parts with $20.43 billion. The largest import market of this product group was Asia.

Importing computers, electronic products, and components from South Korea was $10.53 billion, a sharp increase of 44% from an earlier year. China was after South Korea with $10.36 billion, up 29.2%. Computer import from Taiwan was recorded at $4.98 billion, up 35.5%; from Japan with $2.89 billion, up 39.8%.

From the beginning of the year to the end of June 15, the total import turnover reached $169.58 billion, an increase of 16.3% (equivalent to an increase of $23 0.8 billion) from last year.

In addition to computers, and electronic products, commodity groups with high turnover such as petroleum increased by $2.53 billion, an increase of 128.4%. Coal of all kinds increased by $2.19 billion, equivalent to 135.7% growth.

Source: https://e.nhipcaudautu.vn/economy/vietnam-spends-40bln-importing-computers-electronic-components-since-early-2022-3346496/

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Yeah1 to buy TV firm amid restructuring

Online entertainment company Yeah1 plans to buy a 51 percent stake in TV and radio company STV amid a major restructuring endeavor.

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The deal is set to be completed this quarter. STV, established in 2008, owns lifestyle TV channel StyleTV, stock and finance channel InfoTV and radio channel Joy FM.

The deal was announced after Yeah1 founder and chairman Nguyen Anh Nhuong Tong sold his entire 12.89 percent stake on June 1 after 15 years of leading the company from an online news website to the first media company to be listed on the Ho Chi Minh Stock Exchange.

Several other major shareholders have also been pulling out since February, including DFJ VinaCapital Venture Investment.

Yeah1 has postponed its annual general meeting twice this year saying more time was needed to prepare important documents.

It reported post-tax profits of nearly VND28 billion last year after two years of losses.

Its contract with YouTube was terminated in March 2020 due to a violation of policies, and what began as an operational error has “turned into a real crisis for the company,” Tong once said.

Yeah1 targets revenues of VND588 billion this year, down 45 percent from 2021 and the lowest since 2017.

It plans to issue 78.6 million new shares to increase its capital.

Source: VnExpress

Source: https://e.nhipcaudautu.vn/companies/yeah1-to-buy-tv-firm-amid-restructuring-3346497/

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