On the heels of the billion-dollar auction of Sabeco, the Ministry of Industry and Trade (MoIT) has just released a list of 10 large enterprises in the industry and trade sectors to conduct state divestment in 2018, attracting the attention of foreign and domestic investors.
Tran Kim Oanh, director of Vietrade’s Centre for Industry and Trade Investment Promotion at MoIT, said that the list of the 10 enterprises to be divested by MoIT in 2018 contains many big names.
Specifically, MoIT is expected to divest at least 24.86 per cent from Petrolimex, 46.75 per cent from Vietnam Electricity Construction Joint Stock Corporation (VNE), 63.54 per cent from Machines and Industrial Equipment Corporation (MIE), 53.48 per cent from Vietnam National Textile and Garment Group (Vinatex), and 57.92 per cent from Vietnam Steel Corporation (coded TVN).
The list contains firms from various sectors, such as Foreign Trade Freight Forwarding and Warehousing JSC (Vietrans), General Import-Export and Construction JSC, Vietnam Plastic Corporation (Vinaplast).
Of these, investors are mostly interested in sector-leading enterprises like Petrolimex, Vinatex, TVN, and bigger corporations. However, the representatives of MoIT said that the remaining firms on the list are all operating in highly potential sectors, including processing and manufacturing, construction, agricultural and fisheries production, as well as warehousing and logistics.
Regarding the 2018 M&A market, Nguyen Quoc Viet, deputy general director of AVM Vietnam which provides professional services on investment and business, pegs high hopes on the M&A trend in the industrial sector and said that M&A activities are abuzz, posting significant figures.
Viet said that the industrial sector ranks second among the top five sectors leading the Vietnamese M&A market in 2016 and 2017. Notably, there were 269 M&A deals with a total value of $1.1 billion in this sector in 2016, the brunt of which (118 deals) took place in the consumer goods and retail sector.
“Loosening the ownership limit for foreign investors at public companies will enable the M&A market, especially in the industrial sector,” assessed Viet.
Vu Ba Phu, director general of Vietrade under MoIT, assessed that there are shortcomings in the quantity and nationality of investors taking part in the M&A market as almost all foreign investors come from Asia (mainly Japan, South Korea, and Thailand), keen on taking a slice from the growing consumer goods, financial services, distribution, retail, construction material, and chemicals sectors.
However, North American and European investors have only taken part in such fields as oil and gas as well as consumer goods. Thereby, it is necessary to spur promotion activities and attract investment from these regions.