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Vietnam M&A workshop wrapped up with flying colors in Japan

Vietnam M&A workshop wrapped up with flying colors in Japan

Wednesday, November 13, 2013, 10:42 GMT+7

Most of the attendees of a conference on mergers and acquisitions (M&A) held in Japan on Tuesday came home satisfied as they found what they had expected to find at the event.

Japanese businesses and investors learned of useful information about the M&A market and environment in Vietnam, while those from the Southeast Asian country also found new partners and business opportunities.

More than 90 Japanese businesses and 30 Vietnamese enterprises attended the “M&A tai Vietnam – Suc hut tu thi truong Nhat” (M&A in Vietnam –Attracting Investment from Japan) conference that took place at Tokyo-based New Otani on Tuesday. The event wrapped up with flying colors.

The conference was co-hosted by Tuoi Tre Newspaper and its Japanese counterpart Mainichi, and supported by the M&A advisory Iwakaze Capital Inc and market research firm BWLaws.

It was held as part of a series of events to mark the 40th anniversary of the establishment of diplomatic relations between Vietnam and Japan.

Prime time for M&A

“This is the appropriate time to boost the bilateral trade ties between Japan and Vietnam,” Doan Xuan Hung, Vietnamese Ambassador Extraordinary and Plenipotentiary to Japan, remarked at the event.

Hung said the government has approved the new strategy for industrialization development with strong support from the Japanese side.

The program includes a number of new measures and policies to create a better and easier investment environment for businesses from the two countries.

The envoy said many Vietnamese localities are waiting for Japanese enterprises to come to study the business environment, adding that the M&A trend is an economical and efficient channel of investment.

“This is the prime time for Japanese businesses to determine their Vietnam investment via M&A,” he concluded.

Tran Dinh Khoa, member of the People’s Council of coastal Ba Ria – Vung Tau Province, said his locality is ready to welcome Japanese investors.

Besides the developed infrastructure, the province has also trained a Japanese-speaking workforce to embrace the investment flow from the East Asian country. Japanese will be a compulsory subject at high schools and vocational schools in the province starting 2020, Khoa said.

Japan currently stands behind only France in the list of countries with successful M&A deals in Vietnam, Nguyen Trung Dung, Commercial Counselor of the Vietnamese Embassy in Japan, told attendees.

Last year Japanese enterprises closed 12 M&A deals worth a combined US$743 million with Vietnam, accounting for 34 percent of the total such deals between Vietnamese and international investors.

Hesitations

Despite the appropriate conditions, there are things that keep businesses from both sides hesitant, attendees said.

Hirokazu Yamaoka, former chief of the Japan External Trade Organization (JETRO) in Hanoi, said the lack of information and little knowledge of the Vietnamese business culture are the main issues.

Many local businesses do not have clear and transparent financial reports, making Japanese businesses hesitate to join in the M&A market in the country, he said.

Meanwhile, Le Hai Tra, deputy CEO of the Ho Chi Minh City Stock Exchange (HOSE), said the Vietnamese are also reluctant to close M&A deals as they do not actively seek partners for the deals.

“The Vietnamese firms sometimes have vague targets for development and refuse to share their information with partners unless there is a clear goal during the negotiation process,” he said.

Meanwhile, Dung, the Commercial Counselor, said there are many factors that attract the Japanese firms to seek M&A deals in Vietnam.

“First, there aren’t many chances [for them] to grow in Japan, and the Japanese businesses also wanted to reduce their investment in China,” he elaborated.

Toshiyuki Kamada, CEO of food company Sagami, confirmed the tendency of Japanese businesses to transfer their capital from China to ASEAN countries, with Vietnam being the top destination.

Judy Fan, who represents Cook Foods, said her company’s duck meat processing facility in China used to source materials from Vietnam, but the company will seek a Vietnamese partner to cooperate under the M&A scheme.

Nishiyama said Japanese investors are interested in the education and training, healthcare, beverage, retail, spare electronic parts, and expressway constructing sectors.

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