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Tag: M&A

  • HSBC Bolsters Asia Technology M&A Team

    HSBC Bolsters Asia Technology M&A Team

    HSBC Holdings has hired Jeremy Choy to head its Asia Technology Mergers & Acquisitions (M&A) team, a Hong-Kong based role that will also see him work with technology companies in areas such as initial public offerings and financing, Bloomberg reported, citing unnamed sources close to the matter.

    Choy, who is expected to start in his new role as early as next week, joins HSBC from boutique investment bank China Renaissance, where he worked for 4 years, most recently as managing director and head of M&A. He will report to Rajeev Sahney, the bank’s head of Asia-Pacific advisory and corporate, Bloomberg said.

    According to his LinkedIn profile, Choy also worked for J.P. Morgan’s North Asia M&A team for 4 years, was an M&A advisor at PacBridge Capital Partners for 2 years, and worked for Goldman Sachs for 5 years.

    Bloomberg reported that the volume of technology, telecommunications and media deals in Asia-Pacific is down 47 percent from the year before.

    However, it noted several large deals on the horizon, including the sale of a major stake in gaming company Nexon Co. and a potential share sale in Hong Kong by Chinese internet giant Alibaba Group.

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  • Concerted action needed for M&A breakthrough

    Concerted action needed for M&A breakthrough

    It is forecasted that the value of mergers and acquisitions (M&A) deals in 2017 will not exceed those of 2015 and 2016, thus, the market needs a boost from enterprises and the government to leverage the opportunities from foreign capital to make a breakthrough.

    In 2016, the total value of all M&A deals over the world was $3.5 trillion, a reduction of 27 per cent on-year, but a high value nevertheless. However, this could be considered an ending of the global M&A’s growth period. Due to Brexit and Donald Trump’s new policies, global M&A activities are becoming harder to predict and there may be some shifts in the flow of investment capital in the world.

    According to the statistics of the Institute for Mergers, Acquisitions and Alliances (IMAA), Vietnam hit a 10-year record hike of $5.2 billion in M&A activities in 2015. In 2016, the value of M&A deals was $5.1 billion, even though experts said that in the second half of 2016, the growth was slowed down because not many big M&A deals were publicised at the time.

    It is forecasted that in 2017 without a breakthrough, the total value of M&A deals in Vietnam may not overtake 2015 and 2016 figures. For a breakthrough, the Vietnamese M&A market really requires a boost.

    The most vibrant industries with the highest number of M&A deals in 2016 were the retail sector, consumer goods production, and real estate. The finance and banking industry did not have many outstanding activities last year. Some other fields, such as education and technology, also attracted M&A investment in 2016.

    Foreign capital has been playing an important role in M&A activities in Vietnam with numerous sizeable deals. For example, Japanese enterprises are now strategic partners to many state-owned enterprises, such as Vietnam Airlines and Petrolimex. Similarly, a number of South Korean enterprises joined the Vietnamese market by investing in agriculture, and investors from Singapore have been paying close attention to some real estate projects.

    According to some assessments made by the government and investors, the progress of equitisation and the state divestment from big enterprises is slow. A wide range of Vietnamese enterprises are luring in investors after being equitised or divested by the state, such as Saigon Beer-Alcohol-Beverage Joint Stock Corporation (Sabeco), Hanoi Beer Alcohol and Beverage Joint Stock Corporation (Habeco), Vietnam Mobile Telecom Services Company (MobiFone), and Vietnam Dairy Products Joint Stock Company (Vinamilk).

    Currently, Sabeco and Habeco’s stocks have been listed on the stock exchange. However, most investors said that this step was implemented more slowly than they had expected.

    There are numerous challenges for the growth of M&A in Vietnam, including changes in the US policies, the withdrawal of the US from the Trans Pacific Partnership or the various obstacles to equitisatisation, the problems of enterprises’ quality, and the scale of the Vietnamese economy.

    To achieve at least 2016’s $5.1 billion in deal value, the state divestment in some Vietnamese enterprises should be implemented more quickly and thoroughly.

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  • Vietnam’s retail sector to see M&A frenzy riding on free trade pacts

    Vietnam’s retail sector to see M&A frenzy riding on free trade pacts

    Vietnam’s retail sector is expected to see heightened M&A activity in 2016, carrying forward the momentum of last year, primarily on account of the large opportunities the south east Asian economy now represents for local and overseas players.

    The sector has turned attractive due to the free trade pacts the country has reached, as part of WTO, according to a government report.

    When Vietnam negotiated to join the WTO, it committed to let investors establish 100 per cent foreign-owned retail businesses from January 2015. In addition, the report attributed the increasing number of retail M&A deals to deeper integration of the country through the Trans-Pacific Partnership (TPP) and the ASEAN Economic Community (AEC), which will see tax exemption for thousands of commodities delivered into each member state.

    “Systematic retail chains account for only 25 per cent of the total market share, while it is 33 per cent in the Philippines, 34 per cent in Thailand, 51 per cent in China, 60 per cent in Malaysia and as much as 90 per cent in Singapore,” the report cited.

    The government expects that with the free flow of goods, human and capital resources within the region, Vietnam’s retail market will become more competitive.

    It projects that the market share will touch 45 per cent by 2020, proving Vietnam to be fertile ground for retail investment.

    Thai retailers are probably the most aggressive in building their presence in Vietnam. Central Group made a debut in 2015 with the acquisition of a 49 per cent stake in electronics stores Nguyen Kim, then later in the year, Berli Jucker, whose parent TCC Holding paid for Metro Cash&Carry in Vietnam, announced its keenness to acquire Big C supermarket operations of French player Groupe Casino. Other interested bidders are Singapore’s Dairy Farm and South Korea’s Lotte Shopping.

    “Both of the two new potential investors are financially strong,” said the report, “Dairy Farm is the second largest retailer in Singapore and Hong Kong, owning popular brands of Cold Storage, Guardian, Wellcome Giant and Hero.” Its revenue hit $13 billion in 2014.

    Meanwhile, Lotte Shopping is South Korea’s biggest retailer with $23 billion turnover in the same year.

    According to the report, Japanese retailing firm AEON, which acquired local peers Fivimart and Citimart last year, is also keen on the deal.

    This year might also be strategic for Japan’s 7-Eleven, as the chain is planning to open its first stores in Vietnam in April 2017.

    “Not only foreign retail giants use M&A deals to enter the market, Vingroup has also, through the M&A route, forayed into the retail industry,” the report said.

    The country’s largest homegrown retailer, Vingroup took over Vinatexmart and Maximark in 2015.

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