Ice19-mergers & Acquisitions News

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Volunme ICE-19, Tuesday November 25th, 2008 Mergers and Acquisitions in Knowledge Enterprises (Part 1)

ICE – the M & A and project investment connection is the source of useful information for domestic and foreign investors, enterprise owners and corporations. M & A News issued weekly by ICE will provide information of buying and selling enterprises in all business fields as well as investment opportunities in projects throughout Vietnam. In addition, ICE Vietnam M & A News will help foreign investors and enterprise owners to update new investment policies and new information of the M&A market in Vietnam.

Main parts: Part 1: M&A Investment Opportunities >>> M&A Investment opportunities

>>> Selling company opportunities Part 2: Global M&A market >>>Top Global M&A Deals >>> Top Industries: Global M&A Part 3: Vietnam and M&A Tendency-

>>>Vietnam Economy >>> Vietnam investment market >>> Vietnam and M&A tendency >>>Mergers and Acquisitions in Knowledge Enterprises SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE–Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M & A News to contribute ideas or place orders this News-Letter via e-mail. All right reserved. Tel:+84-43-6227724 Email:[email protected] Website:www.vni-connection.com

Page 1

M&A AND INTERNATIONAL INVESTMENT CONNECTION

PART 1: M & A INVESTMENT OPPORTUNITIES M&A INVESTMENT OPPORTUNITIES M&A-71 : Selling a restaurant- bar- cafe in Hoi An

Location

Hoi An

Fields

Restaurant- Bar-Café

Legal Status

Completed

Enterprise status

- Making profit - Stable number of customers - Available infrastructure, modern equipments, good status.

Area

1200m2, the front is 20m

Infrastructure

Garden- Little Cham Corner: Making the modern seafood restaurant at the glass hill, the front is a big aquarium. The light garden is hanged on branch, with the mild light. + Ancient wood house area, was decorated by good light make the point the eyes. + The bar was constructed near the thistle tree according to Cham style.

The strong points and the

- Is the destination not only because of the unique of the products,

advantages of the

professional services, reasonable price but also cultural space.

enterprise:

- Is the strongest attract to the customers coming to Hoi An because “one destination, 2 patrimonies” and foreign investors; especially, is the economic corporation.

Transference form

Whole transference

Transference price

12 billion VND

ICE’s Comment SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this NewsLetter via e-mail. All right reserved. Tel:+84-43-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION

M&A-72: Selling a seafood restaurant and wild beast in Ha Dong

Location

Ha Dong- Hanoi

Fields

Seafood and wild beast

Land legal status

Total using area: 600 m2 - Time for land using: long term, authorized.

Enterprise status

Running - Status: + Space: 200m2 x 3 floors, 2 fronts 15m and 10m, 2- car parking; + 2 karaoke rooms; + 2 bi-a tables, wood floor; + 03 air conditioners, 9000 BTU + New equipments, laptop, printer, LCD, internet, wifi; + High productivity electric generator...

Operating status

Making profit, stable customers

The strong points and advantages

Available infrastructure, modern equipments, good status. Position: advantageous, 300m from highway, front 10m, above front 30m. Experience: running for 4 years. + Advantageous traffic.

Transference form

Whole transference

Transference price

500 million VND

ICE’s Comment

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this NewsLetter via e-mail. All right reserved. Tel:+84-43-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION

M&A- 73: Transferring a private general hospital

Location

Hanoi, 9km from the center

Fields

Hospital, Medicine

Hospital’s information

Total investment: 25 billion - Number of sick-bed: 50- bed, maybe increase 200 beds. - Types: General Hospital and Resort.

Planning indicators of the

+ Area: 5.000m2.

project

+ Construction density: 37% +Height: 4 floors + Target to construct hospital - Legal status: We have the long term land authorization, - Project status: running for 4 years

Legal status

Sufficient and completed

Enterprise status

Running

Operating status

Making profit, average profit: 4 billion/ year

The strong points and advantages of our enterprise

This is a private general hospital, we have a stable number of customers. Our business is operating efficiently about economy and society.

Reason of transference

Focus finance on other project.

Transference types

Whole transference

Transference price

Negotiable

ICE’s Comment

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this NewsLetter via e-mail. All right reserved. Tel:+84-43-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION

SELLING COMPANY OPPOTUNITIES M&A-74: Buying a company operating in construction in Hanoi.

Location

Hanoi

Fields

Construction

Legal status

Completed

Enterprise status

Running

Financial status

Clear, making profit for the last 3 years.

General requirements + Location: Hanoi + Sector: Construction + Managerial experience + Healthy finance, no debt + Buying demand: buy the whole enterprise Transference form

Whole transference

Transference price

Negotiable

ICE’s Comment

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this NewsLetter via e-mail. All right reserved. Tel:+84-43-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION

M&A- 75: A Taiwan company wants to buy a Vietnamese company

Location

Nationwide

Requirements about fields

One of these fields + Labour export. + Travelling tourism + Studying abroad consulting

Legal status

Completed

Enterprise status

Running

Business strategy

Evident

Financial status

Making profit, clear, no tax debt

General requirements

Potential customer system Advantageous position. Professional staffs Having website

Charter Capital

From 2 billion to 3 billion VND

Transference types

100% or buying controlled equity

Transference price

Negotiable

ICE’s Comment

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this NewsLetter via e-mail. All right reserved. Tel:+84-43-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION

PART 2: GLOBAL MARKET M&A Roche to buy biotech co Memory Pharma for $50 million

Roche Holding AG has agreed to buy biotech company Memory Pharmaceuticals Corp for about $50 million in cash, the Swiss drug maker said on Tuesday.

( Source: Reuters) Roche will start a tender offer for all outstanding Memory common stock at $0.61 per share, a premium of 319 percent to its closing price on Monday.

Memory develops drugs for the treatment of debilitating central nervous system disorders such as Alzheimer's disease and schizophrenia. Roche already partners Memory drug candidates for treating those diseases. Big pharmaceuticals makers like Roche, facing the loss of exclusivity on key products and ever-tougher development and approval processes, have been keen to invest in promising biotech drugs by acquisition or licensing deals to bolster their pipelines of new drugs.

China insurers unlikely to buy AIG units-regulator

Chinese insurers will probably not buy the Asian assets of American International Group Inc, a senior regulator said on Tuesday.

"I think it's unlikely," Meng Zhaoyi, head of the international department at the China Insurance Regulatory Commission, told reporters. Meng said specifically that he was unaware of China Life's intention to take over the assets. ( Source: Reuters) "I've never heard of that," he said on the sidelines of a conference. A senior China Life manager told Reuters on Monday that the world's biggest life insurer by market value was interested in buying AIG's Asian businesses. AIG, once the world's biggest insurer, is putting its non-essential assets up for sale after receiving a $152 billion bailout from the U.S. government to avoid bankruptcy as it reels from the global AIG to sell plane lessor ILFC to investors- report

International Lease Finance Corp, the plane-leasing business owned by insurer American International Group, will be sold to a group of investors and ILFC's management, Bloomberg reported on Saturday. ILFC founder and Chief Executive Steven Udvar-Hazy told the news agency in an interview that the deal would close early next year. ILFC, one of the biggest buyers of planes from Boeing Co and Airbus, did not immediately return a call seeking comment. AIG, which suffered major losses on mortgage derivatives, is selling assets to repay a loan from the Federal Reserve. The outlook for ILFC has been clouded for months by the predicament of AIG. The plane lessor relied on AIG's blue-chip credit rating for access to capital to buy planes. But when AIG's rating took a hit in September, ILFC was locked out of the debt market. Bloomberg cited Udvar-Hazy as suggesting the unit had a value of about $10 billion. But the investors were not identified.

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this NewsLetter via e-mail. All right reserved. Tel:+84-43-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION

Top Global M&A Deals Target

Acquiror

Value ($M)

32.5% interest in Chesapeake’s Marcellus Shale Assets in the

StatoilHydro ASA

3,375.0

Tata Teleservices Ltd

NTT DoCoMo Inc

2,725.8

Lucite International Group Ltd

Mitsubishi Rayon Co Ltd

1,600.0

Enersis II SGPS SA

Magnum Capital Industrial

1,516.1

Appalachia Basin

Partners Financial Security Assurance Holdings Ltd

Assured Guaranty Ltd

1,457.5

SNS REAAL Groep NV

Koninkrijk der Nederlanden

935.4

Ciba Holding AG

BASF SE

379.1

GPT Group

Stockland

344.4

Marfin Investment Group Holdings S.A.

Dubai Financial Group LLC

326.5

Three Giant Iron Ore Ships

Rio Tinto Ltd

315.0

Top Industries: Global M&A Industry

Deals

Value ($M)

Grand Total

8,544

551,999.0

Financials

1,585

248,363.0

Industrials

1,920

75,441.4

Energy

364

51,804.0

Basic Materials

823

30,655.7

Utilities

257

30,041.2

Technology

918

27,698.3

Telecommunications Services

175

23,907.9

Non-Cyclical Consumer Goods / Services

686

22,442.5

Healthcare

459

20,867.1

( Source: Reuters) SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this NewsLetter via e-mail. All right reserved. Tel:+84-43-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION

PART 3: VIETNAM AND M&A TENDENCY- Merger & Acquisition in knowledge Enterprises ( Part Vietnam Economy Inflation rate estimated at 22% in 2008: MPI

How about the goal of curbing inflation in 2009? The goal for 2009 is to rein the CPI increase in at less than 15%. We have every reason to believe we will be successful in this.

projects will help consume construction materials, which will help clear the big stocks of steel and cement. What about investments?

Minister of Planning and Investment (MPI) Vo Hong Phuc believes that the inflation rate for 2008 will be some 22% only, and that economic growth goals are within reach. Has inflation been controlled? Previously, we reported to the National Assembly that the estimated inflation rate was about 25% for this year. However, we have discussed this with the General Statistics Office and we have agreed that the inflation rate will be around 22% as the consumer price index (CPI) increased by 0.18% only in September, and decreased by 0.19% in October. The CPI of October 2008 was 21.69% higher than that of December 2007, and there will be another minus figure in November. Commodity prices may increase a little in December, the month before Tet.

The economic growth rate goal for 2009 is 6.5%. What would you say about the goal and our ability to attain it? We will reach the goal if we have determination. The government gave three scenarios to the National Assembly: 6.5%, 7% and 7.5%. After considering the situation and the forecast happenings in the world, we suggested the 6.5% scenario. With the 6.5% growth rate scenario, agriculture production has to contribute 2.8% to the growth rate (it is over 3% in 2008). The added value of the industrial sector is projected to be 7.4%. In such difficult conditions, how can we stimulate the operations of industries in order to ensure a high economic growth rate? The solution is to aim at the construction and construction material industries. The Prime Minister has asked us to reconfigure the solutions for the last two months of 2008 and the first months of 2009 by stimulating construction. Pumping money into effective investment

Regarding investments, the National Assembly has ratified the budget of VND112tril. Investments in stateowned groups, including Petro Vietnam, Vietnam Textile and Garment, Rubber Group and Vinacafe, will decrease, while only investments in companies that serve public interests will remain unchanged. As for official development assistance, the government has ordered the acceleration of disbursement. Moreover, lower bank interest rates will create favorable conditions for enterprises to implement their projects. We also have over $100bil worth of committed foreign direct investment capital, and what we have to do is to have the disbursement of over $11bil as forecast. The government will create the most favorable conditions for investors to speed up disbursement.

(Source: TBKTVN)

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this NewsLetter via e-mail. All right reserved. Tel:+84-43-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION

Vietnam Investment Market RoK power investors interested in Vietnam market

Vietnam tops the list of electricity markets that the Republic of Korea (RoK) investors are interested in, a recent survey conducted by the RoK Electric Association said.

( Source: VNA) In the list, Vietnam stands in front of the Philippines and China and many other

markets, the survey added. The RoK government has spent more than 25 billion won (about 27 million USD) to help RoK investors study investment opportunities in the field of electricity in foreign countries, including Vietnam, according to a report delivered at a seminar on power policy coordination between the RoK, Vietnam, and China, in Seul on November 21. At present, the RoK investors are seeking information about the sector in Vietnam, Cambodia, Indonesia, and the Philippines. At the seminar, representatives from the RoK, Vietnam, and China discussed possibilities of coordination between nations in responding to the globalization in the electricity sector. Representative of Vietnam’s electricity industry, the Electricity Vietnam Corporation (EVN), brief the seminar on investment chances and forms of investment in Vietnam, and the Vietnamese government’s supportive policy to foreign investors.

Indochina, VinaCapital seek property deals in Vietnam

Indochina Capital and VinaCapital Group, two of Vietnam’s biggest investment managers, are raising funds to invest in the country’s property market as the credit crunch hurts local developers, the world’s leading financial news agency Bloomberg reported.

(Source: Bloomberg) VinaCapital, Vietnam’s biggest fund manager, is in talks with investors to start its second real-estate fund early next year, CEO Don Lam was quoted by Bloomberg as saying. In the mean time, Rick Mayo- Smith, co-chairman of Indochina Capital - Vietnam 's third biggest investment firm - said that Indochina Capital plans to increase the size of its property fund to between 400 million USD and 500 million USD when it closes in the first half of next year, from the 155 million USD it raised in July. High interest rates and limitations on bank lending have forced smaller developers to delay projects or sell assets to raise money. This has opened up opportunities for Vietnam’s fund managers who say there is still demand for apartments, offices, hotels and malls as the country continues to grow at the fastest pace among Southeast Asia ’s six biggest economies, Bloomberg reported. “The opportunities have never been better,” Mayo-Smith was quoted as saying in a November 18 interview. “A number of projects have halted in Vietnam due to lack of financing; we see people bringing us projects and land where they need investors or they want to sell to finance some of their other projects.” SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this NewsLetter via e-mail. All right reserved. Tel:+84-43-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION Investors move to foster agricultural growth

The Hanoi Times - Measures to harmonise the cooperation and assistance policies of donors and foreign investors in Vietnam’s agricultural and rural development were tabled for discussion at the annual meeting of the International Support Group (ISG) in Hanoi

( Source: VNN) Opening the event, Minister of Agriculture and Rural Development Cao Duc Phat

said that Vietnam would like to consult donors and foreign investors on its policies regarding the development of human resources in rural areas, farmland management, and food security for remote regions and areas inhabited by ethnic minorities. The minister praised past recommendations as well as the exchange of information during previous meetings. “Vietnam has achieved good results and obtained useful information from many international organizations at previous consultancy conferences,” he said. While reiterating Vietnam’s main priority on agricultural and rural development, Minister Phat pointed out the challenges this sector has faced this year, including unfavorable weather conditions, outbreaks of cattle and poultry diseases and high production costs. The minister assured the participants that, in spite of these difficulties, Vietnam’s agricultural sector hopes to post a growth rate of 3.6 percent for 2008, compared with 3.4 percent last year. The Swedish Ambassador to Vietnam, Rolf Bergman, who co-chaired this year’s meeting, said that policies addressing cooperation with Vietnam would be adjusted to meet changes in its developmental requirements in the years to come. With regard to agriculture, cooperation projects will focus on grassroots mechanisms for democracy practice, environmental protection, and along with reducing environmentally-friendly production. According to the Ministry of Agriculture and Rural Development, the agricultural sector has received massive support from donor countries, international organizations and individuals. Between January and October, the agricultural sector benefitted from 30 official development assistance (ODA) programmes and projects worth a total of 313 million USD.

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this NewsLetter via e-mail. All right reserved. Tel:+84-43-6227724 Email:[email protected] Website:www.vni-connection.com

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M&A AND INTERNATIONAL INVESTMENT CONNECTION

VIETNAM AND M & A TENDENCY Small banks: Increase chartered capital or merge?

Commercial banks have only two months left to raise their chartered capital to VND1tril. Those banks that cannot reach VND1tril ($62.5mil) will have to be merged into other banks. According to the State Bank of Vietnam, as of the end of October 2008, Vietnam had nine joint-stock banks that had to increase chartered capital to VND1tril: First Joint Stock Commercial Bank (FCB), which now has the chartered capital of VND609bil ($38.06mil), Gia Dinh Bank (VND500bil or $31.25mil), Pacific Bank (VND566bil or $35.37mil), My Xuyen Bank (VND500bil or $31.25mil), PG Bank (VND500bil or $31.25mil), Kien Long (VND580bil or $36.25mil), Vietnam Thuong Tin Bank (VND500bil or $31.25mil), Dai Tin (VND504bil or $31.5mil) and Dai A (VND500bil or $31.25mil). Nguyen Van Giau, Governor of the State Bank of Vietnam, said that banks have been following necessary procedures to raise chartered capital. Some banks which plan to issue shares to the public are waiting for the State Securities Commission to approve their share issuance plans. While big banks can put their minds at ease as they already have VND1tril in chartered capital, small banks are now like cats on hot bricks. They have to get VND1tril in chartered capital by early 2009 and are finding it a tough ask. Vu Duc Nghia, Deputy General Director of Bien Viet Securities Company, said that it is really difficult to increase chartered capital at this moment. “The prices of many bank share items on the OTC market have been falling to below face value, while there have been very few transactions,” Nghia said. The analysis division under Euro Capital said that it is now not a favorable time for banks to increase chartered capital by issuing shares to the public. They said that if banks issue shares, in all likelihood the share issuances will not attract investors, and investors will doubt the banks’ capacities. Meanwhile, Nguyen Tri Thanh, Deputy General Director of Gia Phat Securities Company, asked: “Why don’t banks think of merging into each other to become bigger and more competitive?” “Merging small banks has been successfully carried out in some countries neighboring Vietnam like Malaysia, Thailand and the Philippines,” Thanh said. Nghia from Bien Viet said that the State Bank of Vietnam should consider delaying the deadline for raising capital in order to minimize risks for banks.

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this NewsLetter via e-mail. All right reserved. Tel:+84-43-6227724 Email:[email protected] Website:www.vni-connection.com

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Mergers and Acquisitions in Knowledge Enterprises Two Key Success Factors for Successful Mergers and Acquisitions in Knowledge Intensive Enterprises It has been estimated that as many as 70% of mergers and acquisitions fail to provide value for shareholders. Yet, while M&A activity has slowed in the current economic downturn, it continues to be viewed as an engine for growth and value. With a global, information economy, markets have become much more efficient than in the past. This has intensified competition and driven price competition. As a consequence, companies struggle to create value through new product releases and cost leadership through scale. Companies that fail to innovate and cut costs face serious adverse consequences. This has created an environment where mergers and acquisitions appear to be a fast way to achieve one or both of these advantages. However, valuations in the past 3-4 years have been extremely high and companies have overpaid. These high valuations have led managers to try to speed up the integration process and reduce costs as quickly as possible to try to show value creation. While this occasionally works, it has a high cost in the form of loss of knowledge. Our research shows that successful M&A in knowledge-intensive businesses is usually hampered by both a loss of knowledge and poor employee perception of the target or acquirer. Unfortunately, managing the M&A process successfully, in the context of knowledge transfer and employee perception, requires a much longer transition process. This directly conflicts with managements’ focus on speed of integration and cost cutting. Companies that want to be successful in M&A will need to address this and rethink the M&A integration process. This will help companies to “begin with the end in mind,” and may help them to evaluate potential target valuations…

(ICE: Collection)

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE–Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M & A News to contribute ideas or place orders this News-Letter via e-mail. All right reserved. Tel:+84-43-6227724 Email:[email protected] Website:www.vni-connection.com

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