fivehundred magazine > Practice area spotlight: M&A > Seeing value in Vietnam

Seeing value in Vietnam

Vietnam’s M&A market is on an upward trajectory. Frasers Law Company’s
Justin Gisz, Pham Thanh Mai and Nguyen Thi Minh Ha explain why

Please give us an overview of the current legal market in Vietnam and how any recent developments have impacted your practice?

The legal market in Vietnam is stronger and more vibrant than ever before and is growing rapidly. The growth of the legal market is a corollary of the rapid development and expansion of Vietnam’s economy, which, commencing from a very modest base 30 years ago, has been one of the stellar performers worldwide during the last 20, and in particular last ten, years.

Ever-increasing enthusiasm for Vietnam among foreign investors – particularly from Japan, Korea, and other Asian jurisdictions – has recently been matched by a rapid increase in the sophistication and financial means of local Vietnamese investors.

Foreign investors in particular are evincing ever-increasing levels of demand for experienced, high-quality, and transparent M&A advice in Vietnam.
What significant trends exist in the M&A market presently? Are you seeing these just domestically or internationally as well?

Vietnam is experiencing unprecedented levels of M&A activity during 2018.
Foreign investors continue to see excellent value propositions in successful, domestic Vietnamese enterprises. Corporate investor interest in Vietnam also continues to increase, as does the interest of investment funds of different types from jurisdictions all over the world.

In addition, the Vietnamese government’s programme of divestment of state-owned capital in Vietnamese companies has gained much traction during 2018, and many of the equity stakes on offer to foreign and domestic investors as a result are in many cases very attractive.

Most of these factors are primarily domestic in nature, except from the perspective that foreign investors continue to see value opportunities in Vietnam which are superior to those which they are able to identify in other jurisdictions.


What are the three biggest challenges to practising M&A in Vietnam at the moment?

The comparatively early stage of development of the legal system in Vietnam is one of the key challenges to M&A practitioners, as is the comparative lack of clarity and consistency in some of the key legislative instruments which underpin the M&A market. That said, the clarity and consistency of applicable law in Vietnam has improved leaps and bounds since 2014.

Similarly, although transparency does remain somewhat of a jurisdictional concern, the overall landscape in Vietnam, from a transparency perspective, has improved markedly in recent years.

It is often a significant challenge to get foreign and Vietnamese counter-parties ‘onto the same page’, from a transaction documentation perspective, as the gap in expectations as to necessary degrees of detail and sophistication in transaction documents is often very wide.


How does M&A fit into the firm as a whole? Is it easy to collaborate with other teams?

The M&A practice group is one of the strongest within our firm and has had consistently very strong results during the last decade or more. Our team has no difficulty at all in collaborating with any of the other practice groups within
our firm. Such collaboration occurs frequently, for example in the context of legal due diligence investigations into target companies.


What advice would you give to the next generation of mergers and acquisitions lawyers?

Learn coding and become an IT/AI expert as well as an M&A lawyer!

Also, try to gain as much exposure as possible to M&A transactions in and in connection with as many different jurisdictions worldwide as possible. Cross-jurisdictional skills and experience will become increasingly in demand as the years go by.


What are your predictions for mergers and acquisitions over the next five years?

Vietnam’s M&A market will continue to develop and go from strength to strength, as the nation’s economy does the same. Local investors will continue to increase in prominence as their ability to compete financially with international investors increases.

The continuing equitisation and floating of state-owned enterprises and divestment of state-owned capital will give rise to a more vibrant and competitive economy, which in turn will fuel the growth in size and sophistication of the M&A market.

The legal and regulatory regime will continue to develop and improve, and the pursuit of transparency will achieve increasing levels
of success.

Vietnam is on an upward trajectory which will certainly not abate during the next five years and nor is it likely to abate for many years thereafter.