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Vietnam
International Investment Connection and Enterprises Trading., JSC
Weekly issued by ICE – M&A via email and website
&
wWw.ice.com.vn & wWw.ma-vietnam.com
Weekly issued to about 82.000 emails of investors, managers, and investment organizations & groups in Vietnam or overseas
Volunme ICE-24, Tuesday December 30th, 2008 Mergers and Acquisitions in Knowledge Enterprises (Part 6) 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 >>> OTC Market >>> Vietnam investment market >>> Vietnam and M&A tendency >>>Mergers and Acquisitions in Knowledge Enterprises (Part 6)
1
M&A AND INTERNATIONAL INVESTMENT CONNECTION PART 1: M & A INVESTMENT OPPORTUNITIES M&A INVESTMENT OPPORTUNITIES
M&A-81: Sell a company operating in garment in Hai Duong.
Location
Hai Duong
Business fields
Exported garment
Legal status
Completed, clear and no tax debt
Enterprise status
Good running
Real estate information
Total area: 8500m2 Constructive area: 5000m2 Time for renting land: 50 years Target: Industrial land
The strong points and the
+ The factory has built 2-floor strong concrete, nice and modern
advantages of our
+ The equipments imported from Germany
enterprise:
+ High-skilled staff. + Stable goods source.
Transference type Transference price
Whole transference 2 million USD.
ICE’s evaluation
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
Page 2
M&A AND INTERNATIONAL INVESTMENT CONNECTION
M&A-82: Sell a 2-star hotel in Hai Phong
Location
Duong Kinh district, Hai Phong city
Business fields
Hotel, restaurant massage, physical therapy
Charter capital
1.500.000.000 VNĐ
Official operating year
2005
Legal status
Good, no debt
Financial status
Running efficiently
Enterprise status
Total area: 1.105m2, length 50m, width 22m. - 2 star hotel + A villa. + Plus the area 180m2 + Staff area 50m2. + Uninterrupted area with the hotel 60m2. + High-tension station 160m2 and Japanese dynamo 100KVA. - 6 floors, area 245m2x6 floors = 1.470m2 ( including 32 rooms, 2 VIP rooms) - 1 villa including 1 drawing-room and 3 floors, 5 WC….
The strong points and the advantage of the enterprise
We have many partners, stable number of customer. Other advantages: near the city center, good service…
Transference reason
Business converting
Transference type
Whole transference
Transference price
20 billion VNĐ (including enterprise, asset and customer list)
ICE’s evaluation
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
Page 3
M&A AND INTERNATIONAL INVESTMENT CONNECTION
M&A-83: Sell the share of decoration company
Location
Tan Phu district, Ho Chi Minh city
Business fields
Decoration
Type of enterprise
Limited company
Official operating year
2006
Legal status
Clear, no debt
Financial status
Good running
Workshop information
Modern
The strong points and the
Now our enterprise is owning hundred of forms, special works.
advantage of the enterprise Transference reason
Business converting
Transference type
50% transference
Transference price
Negotiable
ICE’s evaluation
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
Page 4
M&A AND INTERNATIONAL INVESTMENT CONNECTION SELLING COMPANY OPPORTUNITIES
M&A- 84: Buy a company operating in producing.
Investor information
An investor in Ho Chi Minh city wants to buy a company producing sugar-cane
Location
Nationwide, the location in the city is an advantage
Business requirements
Sugar-cane purchasing, producing sugar-cane
Legal requirements
Clear and no debt
Operating status
Having profit
requirements Business strategy
Clear, has potentially to develop
More requirement
Having stable purchasing source
Buying type
Whole enterprise
Buying price
Over 5 billion VND
ICE’s evaluation
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
Page 5
M&A AND INTERNATIONAL INVESTMENT CONNECTION
M&A- 85: Buy a company operating in environment in Hanoi.
Location
Hanoi
Business requirement
Waste matter settling
Legal requirement
Clear and no debt
Operating status
Sufficient
requirement Financial requirement
Having profit
Requirement
More than 3 year operating + The name of company having component “ Environment” + No need to buy the enclosing project
Buying type
Whole
Buying price
Negotiable
ICE’s evaluation
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
Page 6
M&A AND INTERNATIONAL INVESTMENT CONNECTION PART 2: GLOBAL MARKET M & A Western Canadian Coal says to buy Cambrian Mining
Western Canadian Coal has agreed to take over its key shareholder, London-based Cambrian Mining Plc, in a 28.8 million pound ($42 million) deal that would consolidate the companies' metallurgical and thermal coal assets.
( Source: Reuters) Under the proposal, which does not yet constitute a formal offer, Western
Canadian will pay 0.75 of its own shares for each Cambrian share, the companies said in a statement. The offer represents a premium of about 48 percent on Cambrian's share price as of Dec. 15, which was a day before Cambrian said it was in discussions about a possible takeover. Based on Wednesday's prices, the deal represented a premium of about 9 percent. Shares of Western Canadian were at flat 56 Canadian cents on the Toronto Stock Exchange, while Cambrian rose 19 percent to 21.5 pence in London trading. Cambrian owns about 34 percent of Vancouver, British Columbia-based Western Canadian's outstanding shares and C$34 million in convertible debt and loans in Western, the companies said. The deal will add Cambrian's coal assets in West Virginia to Western Canadian's British Columbia properties. The combined company has coal production potential of up to 10 million tonnes a year from existing assets, they said. Western Canadian's share price jumped to a high of C$10.99 in June on soaring demand for metallurgical coal, but the stock has since dropped by about 95 percent.
IndyMac to Be Sold to Group of Equity, Hedge Funds, NYT Reports
IndyMac Bancorp Inc., which failed in July after a run on its deposits, is close to being sold by the government to private equity and hedge fund firms, the New York Times reported, citing people briefed on the deal. The buyers are J.C. Flowers & Co. and Dune Capital Management, New Yorkbased private equity firms, and the hedge- fund firm Paulson & Co., the unidentified people told the newspaper. The sale by the Federal Deposit Insurance Corp. would be among the first involving unregulated firm buying a bank- holding company, the Times said in its Dealbook section. The group would buy all of Pasadena, California-based IndyMac, including 33 branches, its reverse-mortgage unit and a $176 billion loan-servicing portfolio, the newspaper said. An announcement could be made as soon as tomorrow, the Times said...
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
Page 7
M&A AND INTERNATIONAL INVESTMENT CONNECTION
Three Japan insurers in talks to merge: source
Japan's Mitsui Sumitomo Insurance Group Holdings Inc, Aioi Insurance Co and Nissay Dowa General Insurance Co are in talks to merge, a company source said, in a move that would create the country's largest non-life insurer. Traders snatched up shares in the three companies, while shares of Tokio Marine
( Source: Reuters) Holdings Inc, currently Japan's top non-life insurer, lost some ground.
"Investors liked the merger news as it sparked hopes of greater profitability and less competition in the sector," said Yoshinori Nagano, a chief strategist at Daiwa Asset Management. The three aim to reach a basic agreement on the deal by March 2009, the source said on Monday. Japanese media, including the Nikkei business daily and public broadcaster NHK, said the three were in talks to merge as early as next autumn. Automobile and housing sales have been sluggish amid the economic downturn, hitting demand for car and fire insurance, prompting the non-life insurers to seek ways to boost competitiveness A sharp slide in the value of securities holdings has also weakened the financial standing of casualty insurers as well as life insurers and other financial institutions, giving them another incentive to join forces. Unlisted Yamato Life Insurance filed for bankruptcy protection in October with nearly $3 billion in debt as the financial market turmoil battered its investments, making it the first Japanese financial institution to fall victim to the global. Among the three companies in talks, Aioi fell into a net loss in the business year that ended in March due to subprime loan-related losses. SURGING SHARES A merger of Mitsui Sumitomo, Japan's second-biggest non-life insurer, fourthranked Aioi and No.6 Nissay Dowa would create the biggest player in the domestic market with net premium revenue of about 2.7 trillion yen ($30 billion). That would surpass Tokio Marine by 22 percent. Net premium revenue, a key indicator of non-life insurers' earnings strength, is roughly equivalent to income from policyholders minus the amount the company itself pays for reinsurance. Tokio Marine, however, still leads the three companies combined in market value. Its market capitalization comes in at 2.1 trillion yen ($23.18 billion), compared with 1.8 trillion yen for the other three insurers. Shares of Mitsui Sumitomo rose 6.4 percent to 2,835 yen and Aioi surged 15.5 percent to 469 yen in midafternoon trade, outperforming the Nikkei average .N225, which slid 0.7 percent. Nissay Dowa jumped 12.5 percent to 566 yen, while Tokio Marine fell 0.6 percent to 2,615 yen. Mitsui Sumitomo, Aioi and Nissay Dowa said in separate statements that they had nothing to announce at this time. Besides a sharp slide in stocks and sluggish insurance demand, the surging yen has eroded the value of insurers' foreign-currency denominated assets such as U.S. Treasuries.
SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this NewsLetter via e-mail. All right reserved. Tel:+84-43-6227724 Email:[email protected] Website:www.vni-connection.com
Page 8
M&A AND INTERNATIONAL INVESTMENT CONNECTION Top Global M&A Deals Target
Acquiror
Value ($M)
Distribucion y Servicio D&S SA
Inversiones Australes Tres Ltda
2,660.2
Certain assets & business of Unicom and
China United Network Communications Corp Ltd
938.8
Treasure Island Corp
Ruffin Acquisition LLC
775.0
Long Lake Project
Nexen Inc
610.0
Provident Bankshares Corp
M&T Bank Corp
344.2
NikkoCiti Trust and Banking Corp
Mitsubishi UFJ Trust and Banking Corp
281.1
2625 Bed Spaces across 13 Properties
UNITE UK Student Accommodation Fund
262.3
TV Guide Network Property
Allen Shapiro and One Equity Partners LLC, a unit
255.0
Netcom parents
Of JPMorgan Chase & Co Kazakhstan Pipeline Ventures TOO
KazMunayGaz-Servis TOO
250.0
First Tranche of Water Assets
Pungurusan Aset Air Bhd
249.9
Top Industries: Global M&A Industry
Number of Deals
Value ($M)
Grand Total
8,602
441,914.0
Financials
1,633
238,599.0
Industrials
1,973
36,794.9
Utilities
274
32,513.2
Energy
357
25,569.2
Telecommunications Services
166
23,937.7
Technology
893
21,617.2
Basic Materials
853
18,905.4
Non-Cyclical Consumer Goods / Services
630
17,612.3
Cyclical Consumer Goods / Services
1,355
13,460.9
(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
Page 9
M&A AND INTERNATIONAL INVESTMENT CONNECTION PART 3: VIETNAM AND M&A TENDENCY- M & A in knowledge Enterprise (Part 6) VIETNAM ECONOMY Vietnam’s economy: one year, two crises
It is unusual that this year Vietnam has been affected by two continuous shocks, called the “two crises” by some experts Also this year, Vietnam has had to change its priorities twice. The two shocks have brought the country face to face with the threat of stagnation. The first crisis That was the crisis of fuel, food, steel prices, etc. in the world. Some said that as Vietnam has crude oil and rice for export, so the country might have benefitted from this crisis and avoided negative impacts. It is true that Vietnam exports crude oil, but it imports plenty of petroleum. The increase of food prices in the global market also made food prices in the local market rise. Vietnam’s high inflation was due to local factors, plus impacts from the global crisis. The local factor originated from the country’s pursuit of high economic growth, which brought about an increase in the total mode of payment, an increase of outstanding debt higher than the growth of GDP. The normal ratio between the increase of the total mode of payment and the growth of GDP is less than 2.5 times, but Vietnam’s was always higher than the average. In the period of 2004-2007, the total mode of payment rose by 30.3% per
year while GDP growth was 8.23% per year. The ratio between the growth of the total mode of payment and the GDP growth reached as high as 3.7 times. The figure was even higher in 2007.
inflation in 2008 might exceed 30% while its trade deficit might surpass $30 billion. They recommended that Vietnam devalue its currency by 2025% and ask for the International Monetary Fund’s assistance.
Meanwhile, lending interest rates were low and the volume of capital pumped into the stock market and real estate was high. Economic growth contributed by investment capital accounted for 57.5%, by labour 20%, by productivity increase and other factors (investment effectiveness, labor productivity, etc.) just 22.5%.
But the reality turned out not as bad as this. Since June and July, inflation and the trade deficit, the two principal problems of Vietnam, have fallen. Inflation from July to November was 0.38%/month, much lower than the level of the first half of 2008 and lower than the savings interest rate. The trade deficit from June to November was less than $1 billion ($529 million per month on average).
Investment efficiency is shown through the Incremental CapitalOutput Rate or ICOR (the ratio of investment to growth, equal to one divided by the marginal product of capital. The higher the ICOR, the lower the productivity of capital. The ICOR can be thought of as a measure of the inefficiency with which capital is used. In most countries the ICOR is in the neighborhood of 3). The ICOR has increased in recent years, from 4.85 in 2005 to 5.04 in 2006, 5.38 in 2007 and perhaps 5.9 this year. These factors, plus inflation in the world pushed up inflation in Vietnam (up to 2.86% in the first half of 2008). Besides inflation, Vietnam’s trade deficit was very high. The trade deficit in 2007 was $14.12 billion or more than $1 billion per month. In the first five months of 2008, the trade deficit averaged $2.695 billion per month. International organizations and experts warned Vietnam that its
There were many reasons for this. The main reason was the government’s timely change of the priority from economic growth to controlling inflation. Another was the government’s eight groups of solutions, especially the solution of tightening the monetary policy. The second crisis Those two problems having just been solved, the real estate and credit crisis in the US erupted in midSeptember, spreading very quickly to the financial, monetary, labour sectors and to other countries. This crisis has finally hit Vietnam, an economy in which 60% of its growth depends on foreign investment and exports, an economy that has been a member of the World Trade Organization (WTO) for just two years.
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
Page 10
M&A AND INTERNATIONAL INVESTMENT CONNECTION
The country’s export revenue has decreased month by month since August. Industrial growth has been dropping since July. The number of foreign tourists coming to the country has been falling since September. The flow of portfolio investment is more out-going than in-coming. The VN-Index is stumbling and has returned to the starting point of 3-4 years ago. The threat of economic stagnation has appeared. Once again, the government has had to change its goals from controlling inflation to preventing economic stagnation, with an urgent package of five solutions, emphasising demand stimulation, and by introducing a financial package. The demand stimulus package is not restricted to $1 billion as the government said before. The total value could reach $6 billion. This figure is much lower than the packages of big countries but it is big compared to the country’s resources. This financial package is equivalent to
6.8% of Vietnam’s GDP in 2008 (around $88.5 billion), and 26% of the country’s foreign currency reserve (over $22 billion). This is the government’s great effort in the situation of overspending and modest foreign currency reserve. The change reveals the government’s sharpness in forecasting and determination to prevent economic slowdown. How to stimulate demand? The demand stimulus plan has been researched by macro-plan making agencies. However, there are two great concerns: the criteria to choose which projects benefit from the stimulus package and the pace of the plan’s implementation. First of all, the money for economic stimulus is the government’s money, no matter its source. As it is state money, it is necessary to reject the ask-give mechanism and transparency is a must.
In choosing projects to benefit from the economic stimulus plan, related agencies need to follow the major goal of demand stimulus: preventing economic slowdown. Demand stimulus should focus on the industries where products are in stock (coal, steel, cement, fertiliser, some key agricultural products) and key export items; and labourintensive industries to create more jobs and create purchasing power. Secondly, demand stimulus projects must be implemented very quickly, otherwise they will have little influence. Thirdly, the government should pay attention to a significant method of demand stimulus – price reduction, including further cutting prices of petroleum, transport fees. It also should simplify administrative formalities so that demand-stimulus projects can be carried out very quickly.
(Source: vneconomy)
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
Page 11
M&A AND INTERNATIONAL INVESTMENT CONNECTION
CPI fluctuations challenge economy
The swing of the consumer price index (CPI) in 2008 with inflation raging in the first nine months and deflation signaling in the last three months is imposing huge challenges to Vietnam in 2009.
The General Statistics Office (GSO) reported that after surging continuously in ( Source: VNA) nine months, recording a high rise of 3.9 percent in May, the CPI suddenly dropped to 0.19 percent in October, 0.76 percent in November and 0.68 percent in December. For the whole year, the CPI almost doubled the 2007 figure, a record increase over a decade, said the GSO. The fluctuations in CPI were attributed to the Government’s tightened monetary policy, the global economic recession and fluctuations in the world market. Tran Thi Hang, director of the GSO Trade Service and Price Department, described the CPI downturn in the year-end months as an “abnormal trend” as it was the time the purchasing power, as usual, should have been growing to herald the upcoming traditional New Year festival. Affirming that the CPI’s continuous declines cannot be considered as “deflation,” Hang, however, emphasized that the Government “needs to take actions” to prevent the trend from plunging further. Economists also voiced warnings of the CPI’s reverse growth and considered this a “big problem” in 2009. Acting director of the Vietnam Economics Institute Tran Dinh Thien said it would be very dangerous for relevant agencies to focus on fighting inflation and forgetting about the deflation threat. He pointed to the reality that the national economy and businesses have become almost exhausted after a time-consuming and costly struggle against inflation. To deal with the situation, Vu Dinh Anh, deputy director of the Finance Ministry’s Market and Pricing Research Institute, suggested that the existing monetary and credit policies be further applied flexibly in parallel with the investment and consumption stimulation policies. In doing so, tax reduction for businesses should be considered an important solution to spur domestic investment, Anh said. Recognizing the threat, the Government has recently launched a 100 trillion VND stimulus package, Cabinet members have also resolved to further implement five groups of urgent measures to curb an economic decline.
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
Page 12
M&A AND INTERNATIONAL INVESTMENT CONNECTION
OTC MARKET 25 Dec: OTC Market Kept Frozen.
( Source: Sanotc)
There were almost no transactions on the OTC market except for some contracts among brokers for most liquid stocks such as MB, Eximbank. Some sellers kept being patient posting their orders hoping for some rare buyers interested in their offers. The only focus of the market today was Vietinbank’s IPO news which was scheduled to be released by the late afternoon today. In the monetary market, the new trading band of 3% was first applied today making USD and gold price jump up despite world gold price was down. USD/ Vietnam dong on the free market hit the high for few months to 1USD/ 17,500VND. SJC gold price was 17.5 million VND/ teal. OTC corporate news Phuong Nam Joint stock bank announced the record date on 31 December 2008 to pay dividends. The evident and bonus share rate will be decided at the next Shareholder General Meeting. Financial Lending No II company under Agriculture and Rural Development bank (ALCII) announced IPO of 13,354,100 shares on HOSE on 9 January 2009. The registration and deposited time is from 1 December 2008 to 2 January 2009. An Giang Coffee Joint Stock Company (ticker: AGC) announced adjustment of the first trading day on HaSTC. HaSTC agreed to allow AGC postponement of debut until 5 January 2009 instead of 26 December 2008.
26 Dec: OTC Market Completely Frozen
After 8 years of operation, never has OTC market been in such a stagnant as it is now. No transactions were recorded even among brokers. No stocks were traded even the most liquid ones such as MB or Eximbank. The market drained after Vietinbank IPO.
( Source: Sanotc) Vietnam's Oricombank raises capital base by a third
(Source: Sanotc)
Vietnam's Oricombank, 10 percent owned by France's BNP Paribas, said on Monday it had raised its registered capital by 32.4 percent to 1.47 trillion dong ($87 million) by issuing new shares. The unlisted Ho Chi Minh City-based bank, also known as Phuong Dong Commercial Bank, would issue 36.3 million new shares to shareholders registered by Dec. 27, it said in a statement. Registered capital determines the size of a bank's possible loans and deposits. Of Vietnam's 39 partly private banks, Oricombank and nine others have sold shares to foreign banks as they sought expertise and greater business opportunities in the country of 86.5 million. The number of Vietnamese people with a bank account has risen 36 percent this year to 15 million, or 17 percent of the population, and 13.4 million bank cards are now in circulation, the State Bank of Vietnam said last week. ($1=16,984 dong) (Reporting by Ho Binh Minh; Editing by Alan Raybould)
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
Page 13
M&A AND INTERNATIONAL INVESTMENT CONNECTION
VietinBank Raises $64 Million in Initial Share Sale
Vietnam Bank for Industry & Trade, the nation’s fourth-biggest lender by assets, raised 1.09 trillion dong ($64 million) selling its shares in an initial public offering. The government sold 53.6 million shares in the state-owned bank, according to a statement posted on the Web site of the Ho Chi Minh City Stock Exchange. The average accepted price was 20,265 dong a share, higher than the minimum 20,000 dong required from bidders, the statement said. “Under the current situation of the market, the IPO of Vietinbank is considered as a big success,” Thai Dac Liet, deputy director of the exchange, said in a telephone interview today. “One of the most important factors is that the company set up a reasonable starting price.”
Hanoi-based Vietinbank pressed ahead with its share sale, approved by the government in September, even after the nation’s benchmark stock index became Asia’s worst performer this year. The VN Index has fallen 67 percent ( Source: Sanotc) since Jan. 1 and is headed for the biggest annual loss since Vietnam opened its first exchange in 2000. The bank’s 200 trillion dong of assets account for about 18 percent of the total for Vietnamese lenders, the central bank said in a Nov. 10 statement. Its registered capital is 13.4 trillion dong, the exchange said yesterday. The success of the Vietinbank IPO may be a “turning point” in Vietnam’s sharesale program, known in the country as equitization, according to Liet. Missed Target The Southeast Asian nation sold shares in 73 companies in the first 11 months, compared with a full-year target of 262, the Ministry of Finance said earlier this month. It will have to sell stakes in 948 companies from now until 2010, the Thoi Bao Kinh Te Vietnam newspaper reported this month. The equitization program is behind schedule because of “many difficulties” in the economy and “volatility” in the stock market, according to the finance ministry. Vietnam has slashed its economic growth target for this year to 6.7 percent from an earlier goal of as much as 9 percent. The central bank has cut its benchmark interest rate five times since Oct. 20, to 8.5 percent from 14 percent, to reduce borrowing costs and try to spur the economy. “The IPO of Vietinbank signals the government can successfully speed up the equitization process in 2009 as long as they have a reasonable level of pricing,” Liet said. Foreigners bought 874,397 of the 53.6 million Vietinbank shares, the exchange said. The highest bid at auction was 45,000 dong a share, while the lowest successful offer was 20,000 dong. The bank plans to sell a 6 percent stake to employees and so-called local strategic investors, and 10 percent to foreign strategic investors, Chairman Pham Huy Hung said Dec. 5. 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
Page 14
M&A AND INTERNATIONAL INVESTMENT CONNECTION
VIETNAM INVESTMENT MARKET Vietnam lures over 64 billion USD in FDI in 2008
Vietnam attracted 1,171 new foreign direct investment (FDI) projects with a total registered capital of over 60.2 billion USD in 2008, tripling last year’s figure, reported the Foreign Investment Department under the Ministry of Planning and Investment (MPI).
( Source: VNA) In December alone, the country licensed 112 FDI projects with a combined
registered capital of over 1.17 billion USD. The newly registered capital was mainly poured into the industrial and construction sectors, with 572 projects capitalized at over 32.6 billion USD, accounting for nearly 49 percent of the total number of projects and 54 percent of the total capital. The service sector ranked second with 554 projects with a combined registered capital of 27.4 billion USD, accounting for 47.3 percent and 45.4 percent, respectively. The remaining was injected into the agro-forestry-fishery sector. Most FDI projects licensed in 2008 were wholly foreign-invested, making up 75.3 percent of the total projects and 51.7 percent of the total capital. The projects’ average size reached 51.47 million USD, up sharply from previous years. This year, 311 existing projects registered to increase investment with additional capital of 3.74 billion USD, equivalent to the annual registered capital five years ago. In total, Vietnam attracted over 64 billion USD in both newly registered and additional FDI in 2008, doubling the figure from 2007. The volume of disbursed capital reached 11.5 billion USD, up 43 percent against last year. Malaysia topped the list of 50 countries and territories registering to invest in Vietnam this year with 55 projects capitalized at 14.9 billion USD. It was followed by Taiwan, Japan, Singapore and Brunei. Despite the Vietnamese economy’s difficulties in the year’s first months, FDI enterprises still saw improving business results with total yearly revenues of 50.55 billion USD, a 24.4 percent increase against last year. The figure included 24.46 billion USD in exports, accounting for 40 percent of the country’s total export turnover. However, the sector saw the largest import turnover of nearly 28.5 billion USD, leading to its trade deficit of 4 billion USD or 25 percent of the country’s figure. Over the past year, the sector generated jobs for more than 200,000 laborers, raising the total number of people working in FDI projects in the country to 1.47 million. According to the MPI, in the context of the global economic crisis, this year’s impressive figures in FDI attraction have proved the international business community’s continued confidence in Vietnam’s business environment and the government’s inflation control measures. The ministry, however, forecast that with the unprecedented global economic and financial crisis in the world history, Vietnam’s FDI attraction in the years to come will be very difficult and the volume of disbursed FDI capital may sharply decrease. Therefore, solving difficulties for FDI enterprises, both newly-licensed and operational projects, are defined as the focus of state management on foreign investment in 2009
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
Page 15
M&A AND INTERNATIONAL INVESTMENT CONNECTION Foreign invested projects approved
The PM has just given nod to the project on capacity increasing for planners and surveyors of underground water sources in urban areas. The project is granted with €1.1 million as non-refundable aid by Germany while the Ministry of Natural Resources and Environment will allocate the corresponding capital from its annual budget.
( Source: KTĐT) Deputy Prime Minister Pham Gia Khiem authorized Gia Lai Province to take
over the Japan-funded project on capacity upgrading in agricultural and rural development in the Central Highlands.
Toshiba establishes new VN manufacturing base
Toshiba Corporation announced yesterday that it would meet the growing demand for high-efficiency motors in the global market by establishing a new manufacturing and sales base in Viet Nam. The new company, Toshiba Industrial Products Asia Co Ltd will be located in Dong Nai Province, and will manufacture high-efficiency industrial motors rated at under 100 horsepower, plus their parts. The company will construct a factory on 8ha in Amata Industrial Park. Work is scheduled to begin April 2009. Operation is expected to start in September 2010. Total investment in facilities construction and manufacturing equipment is around US$77 million dollars. Toshiba selected Viet Nam as home to the new motor manufacturing base for reasons of the ability to secure talented human resources, and advantageous logistics to the worldwide market, particularly North America and Asia. The Amata Industrial Park also offers distinct advantages such as tried and tested site management, plus proximity to a modern harbor. The park's location close to HCM City, Viet Nam's largest city, with a population of over 6 million, will also assure access to qualified people. When the new facility reaches full capacity in 2015, it will be able to manufacture up to 1.2 million high-efficiency industrial motors a year, including key components, as required by the market. Key features of Toshiba high-efficiency motors include their low noise and low malfunction rate. As the new company ramps up its business, its initial product line will include parts for export to North America. It will subsequently start exports to China, Southeast Asia and Japan, toward achieving a US$210 million sales target by 2015. Alongside Toshiba's three existing manufacturing bases, Toshiba Industrial Products Manufacturing Corporation in Japan, Toshiba Dalian Co Ltd in China, and Toshiba International Corporation in the United States, Toshiba Industrial Products Asia Co Ltd will form a manufacturing and sales system serving the global market, Toshiba Group targets net sales of US$800 million for its motor business by 2015.
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
Page 16
M&A AND INTERNATIONAL INVESTMENT CONNECTION VIETNAM AND M & A TENDENCY Month sees rise in mergers, acquisitions
December has seen plenty of mergers and acquisitions but acquirers have been more intent on enhancing their market presence than making a financial investment. Watson Wyatt Worldwide, a global consulting firm, announced on Monday its acquisition of the private SMART Human Resource Vietnam Company with operations to start early next year. SMART HR, established in 2001 with offices in HCM City and Ha Noi, offers training and development consulting, talent management, compensation management and salary surveys. Andrew Heard, Watson Wyatt’s ASEAN managing director, refused to disclose the price, saying it "greatly strengthens our company’s presence in the ASEAN market and the Asia Pacific region".
( Source: VNS)
"By establishing operations in Viet Nam, we can provide our global and regional clients with world-class consultancy in one of Asia’s most dynamic emerging markets." Watson Wyatt Vietnam will have personnel in place to meet clients’ demands for international standard services to cement the position established by SMART HR, he said. Globally, Watson Wyatt offers consultancy in human capital, retirement and benefits, insurance and financial services and investment. Last week the US-based TBWA\Group announced it had purchased stake in the marketing, advertising, and communications firm Biz Solutions. Though the percentage of stake and value of the deal are not known, Biz Solution’s name has been changed to Biz TEQUILA. TEQUILA is a brand owned by TBWA. Ian Thubron, a vice president of TBWA\Asia Pacific, expected this integration to help create a leading communication company in Viet Nam, a country that is rapidly becoming a key market for the group. Phan Bich Ha, one of the founders of Biz Solutions and now managing director of Biz TEQUILA, said with support from TBWA the new company would have more foreign clients and a broader range of services. TBWA has a global clientele that includes Apple, McDonald’s, Michelin, Nissan, Singapore Airlines and Standard Chartered Bank. In another acquisition, Elf Gas Saigon, a joint venture between Saigon Construction Corp and French firm Total, has bought the Saigon Gas Holding Corp at an undisclosed price. This enables Total to add another 20 distributors to its network. "The acquisition will secure Total’s position as one of the leading LPG suppliers in Viet Nam, with an increase in the gas market share to 15 per cent," Thierry Pflimlin, senior vice-president of Total Oil Asia-Pacific, said. "Viet Nam is one of our key markets for development and this opportunity for growth fits well with our strategy in the region," he said.
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
Page 17
M&A AND INTERNATIONAL INVESTMENT CONNECTION
Mergers and Acquisitions in Knowledge Enterprises (Part 6) Combination Once the deal is finalized, the integration team is faced with the challenge of combining both the operations and the culture of the two companies. As mentioned previously, a successful combination depends on the ability of the employees of both firms to be able to make sense of the merger and perceive the combination as a positive thing. While the management and integration teams assume the main role in this task, there are often times other individuals in the firm that can play a key part in influencing perceptions and aiding in the transfer of knowledge. These people are the previously mentioned employees, or knowledge transfer individuals, that exhibit the boundary-spanning, entrepreneurial behavior that is key to the creation of value from a merger. Managers of a firm involved in the combination phase of a merger should identify these key employees as the merger progresses. Once identified, it is important to make sure that these individuals understand the goals of the merger, that they see the merger in a positive light, and that they are able to make sense of the merger. Once on board, these employees should be positioned strategically in order to gain the most from their abilities. This strategic positioning should take place at all levels of the firm, from the mailroom to the boardroom. The goal of this strategic placement is to canvas the merged firm with individuals that are ready and willing to make the merger work. Because these individuals have the ability and desire to operate outside of their boundaries if necessary, in an ideal situation this boundary spanning activity will essentially create a web, stretching throughout the new firm. With the right people positioned strategically, the behaviors that these knowledge transfer individuals exhibit, including the ability to act quickly under pressure, think creatively about new products and services, behave flexibly when competitors strike, and take appropriate risks for appropriate rewards, will help ensure a successful integration...
(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 NewsLetter via e-mail. All right reserved. Tel:+84-43-6227724 Email:[email protected] Website:www.vni-connection.com
Page 18
International Investment Connection and Enterprises Trading., JSC
Weekly issued by ICE – M&A via email and website
&
wWw.ice.com.vn & wWw.ma-vietnam.com
Weekly issued to about 82.000 emails of investors, managers, and investment organizations & groups in Vietnam or overseas
Volunme ICE-24, Tuesday December 30th, 2008 Mergers and Acquisitions in Knowledge Enterprises (Part 6) 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 >>> OTC Market >>> Vietnam investment market >>> Vietnam and M&A tendency >>>Mergers and Acquisitions in Knowledge Enterprises (Part 6)
1
M&A AND INTERNATIONAL INVESTMENT CONNECTION PART 1: M & A INVESTMENT OPPORTUNITIES M&A INVESTMENT OPPORTUNITIES
M&A-81: Sell a company operating in garment in Hai Duong.
Location
Hai Duong
Business fields
Exported garment
Legal status
Completed, clear and no tax debt
Enterprise status
Good running
Real estate information
Total area: 8500m2 Constructive area: 5000m2 Time for renting land: 50 years Target: Industrial land
The strong points and the
+ The factory has built 2-floor strong concrete, nice and modern
advantages of our
+ The equipments imported from Germany
enterprise:
+ High-skilled staff. + Stable goods source.
Transference type Transference price
Whole transference 2 million USD.
ICE’s evaluation
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
Page 2
M&A AND INTERNATIONAL INVESTMENT CONNECTION
M&A-82: Sell a 2-star hotel in Hai Phong
Location
Duong Kinh district, Hai Phong city
Business fields
Hotel, restaurant massage, physical therapy
Charter capital
1.500.000.000 VNĐ
Official operating year
2005
Legal status
Good, no debt
Financial status
Running efficiently
Enterprise status
Total area: 1.105m2, length 50m, width 22m. - 2 star hotel + A villa. + Plus the area 180m2 + Staff area 50m2. + Uninterrupted area with the hotel 60m2. + High-tension station 160m2 and Japanese dynamo 100KVA. - 6 floors, area 245m2x6 floors = 1.470m2 ( including 32 rooms, 2 VIP rooms) - 1 villa including 1 drawing-room and 3 floors, 5 WC….
The strong points and the advantage of the enterprise
We have many partners, stable number of customer. Other advantages: near the city center, good service…
Transference reason
Business converting
Transference type
Whole transference
Transference price
20 billion VNĐ (including enterprise, asset and customer list)
ICE’s evaluation
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
Page 3
M&A AND INTERNATIONAL INVESTMENT CONNECTION
M&A-83: Sell the share of decoration company
Location
Tan Phu district, Ho Chi Minh city
Business fields
Decoration
Type of enterprise
Limited company
Official operating year
2006
Legal status
Clear, no debt
Financial status
Good running
Workshop information
Modern
The strong points and the
Now our enterprise is owning hundred of forms, special works.
advantage of the enterprise Transference reason
Business converting
Transference type
50% transference
Transference price
Negotiable
ICE’s evaluation
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
Page 4
M&A AND INTERNATIONAL INVESTMENT CONNECTION SELLING COMPANY OPPORTUNITIES
M&A- 84: Buy a company operating in producing.
Investor information
An investor in Ho Chi Minh city wants to buy a company producing sugar-cane
Location
Nationwide, the location in the city is an advantage
Business requirements
Sugar-cane purchasing, producing sugar-cane
Legal requirements
Clear and no debt
Operating status
Having profit
requirements Business strategy
Clear, has potentially to develop
More requirement
Having stable purchasing source
Buying type
Whole enterprise
Buying price
Over 5 billion VND
ICE’s evaluation
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
Page 5
M&A AND INTERNATIONAL INVESTMENT CONNECTION
M&A- 85: Buy a company operating in environment in Hanoi.
Location
Hanoi
Business requirement
Waste matter settling
Legal requirement
Clear and no debt
Operating status
Sufficient
requirement Financial requirement
Having profit
Requirement
More than 3 year operating + The name of company having component “ Environment” + No need to buy the enclosing project
Buying type
Whole
Buying price
Negotiable
ICE’s evaluation
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
Page 6
M&A AND INTERNATIONAL INVESTMENT CONNECTION PART 2: GLOBAL MARKET M & A Western Canadian Coal says to buy Cambrian Mining
Western Canadian Coal has agreed to take over its key shareholder, London-based Cambrian Mining Plc, in a 28.8 million pound ($42 million) deal that would consolidate the companies' metallurgical and thermal coal assets.
( Source: Reuters) Under the proposal, which does not yet constitute a formal offer, Western
Canadian will pay 0.75 of its own shares for each Cambrian share, the companies said in a statement. The offer represents a premium of about 48 percent on Cambrian's share price as of Dec. 15, which was a day before Cambrian said it was in discussions about a possible takeover. Based on Wednesday's prices, the deal represented a premium of about 9 percent. Shares of Western Canadian were at flat 56 Canadian cents on the Toronto Stock Exchange, while Cambrian rose 19 percent to 21.5 pence in London trading. Cambrian owns about 34 percent of Vancouver, British Columbia-based Western Canadian's outstanding shares and C$34 million in convertible debt and loans in Western, the companies said. The deal will add Cambrian's coal assets in West Virginia to Western Canadian's British Columbia properties. The combined company has coal production potential of up to 10 million tonnes a year from existing assets, they said. Western Canadian's share price jumped to a high of C$10.99 in June on soaring demand for metallurgical coal, but the stock has since dropped by about 95 percent.
IndyMac to Be Sold to Group of Equity, Hedge Funds, NYT Reports
IndyMac Bancorp Inc., which failed in July after a run on its deposits, is close to being sold by the government to private equity and hedge fund firms, the New York Times reported, citing people briefed on the deal. The buyers are J.C. Flowers & Co. and Dune Capital Management, New Yorkbased private equity firms, and the hedge- fund firm Paulson & Co., the unidentified people told the newspaper. The sale by the Federal Deposit Insurance Corp. would be among the first involving unregulated firm buying a bank- holding company, the Times said in its Dealbook section. The group would buy all of Pasadena, California-based IndyMac, including 33 branches, its reverse-mortgage unit and a $176 billion loan-servicing portfolio, the newspaper said. An announcement could be made as soon as tomorrow, the Times said...
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
Page 7
M&A AND INTERNATIONAL INVESTMENT CONNECTION
Three Japan insurers in talks to merge: source
Japan's Mitsui Sumitomo Insurance Group Holdings Inc, Aioi Insurance Co and Nissay Dowa General Insurance Co are in talks to merge, a company source said, in a move that would create the country's largest non-life insurer. Traders snatched up shares in the three companies, while shares of Tokio Marine
( Source: Reuters) Holdings Inc, currently Japan's top non-life insurer, lost some ground.
"Investors liked the merger news as it sparked hopes of greater profitability and less competition in the sector," said Yoshinori Nagano, a chief strategist at Daiwa Asset Management. The three aim to reach a basic agreement on the deal by March 2009, the source said on Monday. Japanese media, including the Nikkei business daily and public broadcaster NHK, said the three were in talks to merge as early as next autumn. Automobile and housing sales have been sluggish amid the economic downturn, hitting demand for car and fire insurance, prompting the non-life insurers to seek ways to boost competitiveness A sharp slide in the value of securities holdings has also weakened the financial standing of casualty insurers as well as life insurers and other financial institutions, giving them another incentive to join forces. Unlisted Yamato Life Insurance filed for bankruptcy protection in October with nearly $3 billion in debt as the financial market turmoil battered its investments, making it the first Japanese financial institution to fall victim to the global. Among the three companies in talks, Aioi fell into a net loss in the business year that ended in March due to subprime loan-related losses. SURGING SHARES A merger of Mitsui Sumitomo, Japan's second-biggest non-life insurer, fourthranked Aioi and No.6 Nissay Dowa would create the biggest player in the domestic market with net premium revenue of about 2.7 trillion yen ($30 billion). That would surpass Tokio Marine by 22 percent. Net premium revenue, a key indicator of non-life insurers' earnings strength, is roughly equivalent to income from policyholders minus the amount the company itself pays for reinsurance. Tokio Marine, however, still leads the three companies combined in market value. Its market capitalization comes in at 2.1 trillion yen ($23.18 billion), compared with 1.8 trillion yen for the other three insurers. Shares of Mitsui Sumitomo rose 6.4 percent to 2,835 yen and Aioi surged 15.5 percent to 469 yen in midafternoon trade, outperforming the Nikkei average .N225, which slid 0.7 percent. Nissay Dowa jumped 12.5 percent to 566 yen, while Tokio Marine fell 0.6 percent to 2,615 yen. Mitsui Sumitomo, Aioi and Nissay Dowa said in separate statements that they had nothing to announce at this time. Besides a sharp slide in stocks and sluggish insurance demand, the surging yen has eroded the value of insurers' foreign-currency denominated assets such as U.S. Treasuries.
SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Vietnam M&A News-Letter – Copyright © 2008 ICE –Enterprise Trading and International Investment Connection – Issued weekly for domestic and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M&A News to contribute ideas or place orders this NewsLetter via e-mail. All right reserved. Tel:+84-43-6227724 Email:[email protected] Website:www.vni-connection.com
Page 8
M&A AND INTERNATIONAL INVESTMENT CONNECTION Top Global M&A Deals Target
Acquiror
Value ($M)
Distribucion y Servicio D&S SA
Inversiones Australes Tres Ltda
2,660.2
Certain assets & business of Unicom and
China United Network Communications Corp Ltd
938.8
Treasure Island Corp
Ruffin Acquisition LLC
775.0
Long Lake Project
Nexen Inc
610.0
Provident Bankshares Corp
M&T Bank Corp
344.2
NikkoCiti Trust and Banking Corp
Mitsubishi UFJ Trust and Banking Corp
281.1
2625 Bed Spaces across 13 Properties
UNITE UK Student Accommodation Fund
262.3
TV Guide Network Property
Allen Shapiro and One Equity Partners LLC, a unit
255.0
Netcom parents
Of JPMorgan Chase & Co Kazakhstan Pipeline Ventures TOO
KazMunayGaz-Servis TOO
250.0
First Tranche of Water Assets
Pungurusan Aset Air Bhd
249.9
Top Industries: Global M&A Industry
Number of Deals
Value ($M)
Grand Total
8,602
441,914.0
Financials
1,633
238,599.0
Industrials
1,973
36,794.9
Utilities
274
32,513.2
Energy
357
25,569.2
Telecommunications Services
166
23,937.7
Technology
893
21,617.2
Basic Materials
853
18,905.4
Non-Cyclical Consumer Goods / Services
630
17,612.3
Cyclical Consumer Goods / Services
1,355
13,460.9
(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
Page 9
M&A AND INTERNATIONAL INVESTMENT CONNECTION PART 3: VIETNAM AND M&A TENDENCY- M & A in knowledge Enterprise (Part 6) VIETNAM ECONOMY Vietnam’s economy: one year, two crises
It is unusual that this year Vietnam has been affected by two continuous shocks, called the “two crises” by some experts Also this year, Vietnam has had to change its priorities twice. The two shocks have brought the country face to face with the threat of stagnation. The first crisis That was the crisis of fuel, food, steel prices, etc. in the world. Some said that as Vietnam has crude oil and rice for export, so the country might have benefitted from this crisis and avoided negative impacts. It is true that Vietnam exports crude oil, but it imports plenty of petroleum. The increase of food prices in the global market also made food prices in the local market rise. Vietnam’s high inflation was due to local factors, plus impacts from the global crisis. The local factor originated from the country’s pursuit of high economic growth, which brought about an increase in the total mode of payment, an increase of outstanding debt higher than the growth of GDP. The normal ratio between the increase of the total mode of payment and the growth of GDP is less than 2.5 times, but Vietnam’s was always higher than the average. In the period of 2004-2007, the total mode of payment rose by 30.3% per
year while GDP growth was 8.23% per year. The ratio between the growth of the total mode of payment and the GDP growth reached as high as 3.7 times. The figure was even higher in 2007.
inflation in 2008 might exceed 30% while its trade deficit might surpass $30 billion. They recommended that Vietnam devalue its currency by 2025% and ask for the International Monetary Fund’s assistance.
Meanwhile, lending interest rates were low and the volume of capital pumped into the stock market and real estate was high. Economic growth contributed by investment capital accounted for 57.5%, by labour 20%, by productivity increase and other factors (investment effectiveness, labor productivity, etc.) just 22.5%.
But the reality turned out not as bad as this. Since June and July, inflation and the trade deficit, the two principal problems of Vietnam, have fallen. Inflation from July to November was 0.38%/month, much lower than the level of the first half of 2008 and lower than the savings interest rate. The trade deficit from June to November was less than $1 billion ($529 million per month on average).
Investment efficiency is shown through the Incremental CapitalOutput Rate or ICOR (the ratio of investment to growth, equal to one divided by the marginal product of capital. The higher the ICOR, the lower the productivity of capital. The ICOR can be thought of as a measure of the inefficiency with which capital is used. In most countries the ICOR is in the neighborhood of 3). The ICOR has increased in recent years, from 4.85 in 2005 to 5.04 in 2006, 5.38 in 2007 and perhaps 5.9 this year. These factors, plus inflation in the world pushed up inflation in Vietnam (up to 2.86% in the first half of 2008). Besides inflation, Vietnam’s trade deficit was very high. The trade deficit in 2007 was $14.12 billion or more than $1 billion per month. In the first five months of 2008, the trade deficit averaged $2.695 billion per month. International organizations and experts warned Vietnam that its
There were many reasons for this. The main reason was the government’s timely change of the priority from economic growth to controlling inflation. Another was the government’s eight groups of solutions, especially the solution of tightening the monetary policy. The second crisis Those two problems having just been solved, the real estate and credit crisis in the US erupted in midSeptember, spreading very quickly to the financial, monetary, labour sectors and to other countries. This crisis has finally hit Vietnam, an economy in which 60% of its growth depends on foreign investment and exports, an economy that has been a member of the World Trade Organization (WTO) for just two years.
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
Page 10
M&A AND INTERNATIONAL INVESTMENT CONNECTION
The country’s export revenue has decreased month by month since August. Industrial growth has been dropping since July. The number of foreign tourists coming to the country has been falling since September. The flow of portfolio investment is more out-going than in-coming. The VN-Index is stumbling and has returned to the starting point of 3-4 years ago. The threat of economic stagnation has appeared. Once again, the government has had to change its goals from controlling inflation to preventing economic stagnation, with an urgent package of five solutions, emphasising demand stimulation, and by introducing a financial package. The demand stimulus package is not restricted to $1 billion as the government said before. The total value could reach $6 billion. This figure is much lower than the packages of big countries but it is big compared to the country’s resources. This financial package is equivalent to
6.8% of Vietnam’s GDP in 2008 (around $88.5 billion), and 26% of the country’s foreign currency reserve (over $22 billion). This is the government’s great effort in the situation of overspending and modest foreign currency reserve. The change reveals the government’s sharpness in forecasting and determination to prevent economic slowdown. How to stimulate demand? The demand stimulus plan has been researched by macro-plan making agencies. However, there are two great concerns: the criteria to choose which projects benefit from the stimulus package and the pace of the plan’s implementation. First of all, the money for economic stimulus is the government’s money, no matter its source. As it is state money, it is necessary to reject the ask-give mechanism and transparency is a must.
In choosing projects to benefit from the economic stimulus plan, related agencies need to follow the major goal of demand stimulus: preventing economic slowdown. Demand stimulus should focus on the industries where products are in stock (coal, steel, cement, fertiliser, some key agricultural products) and key export items; and labourintensive industries to create more jobs and create purchasing power. Secondly, demand stimulus projects must be implemented very quickly, otherwise they will have little influence. Thirdly, the government should pay attention to a significant method of demand stimulus – price reduction, including further cutting prices of petroleum, transport fees. It also should simplify administrative formalities so that demand-stimulus projects can be carried out very quickly.
(Source: vneconomy)
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
Page 11
M&A AND INTERNATIONAL INVESTMENT CONNECTION
CPI fluctuations challenge economy
The swing of the consumer price index (CPI) in 2008 with inflation raging in the first nine months and deflation signaling in the last three months is imposing huge challenges to Vietnam in 2009.
The General Statistics Office (GSO) reported that after surging continuously in ( Source: VNA) nine months, recording a high rise of 3.9 percent in May, the CPI suddenly dropped to 0.19 percent in October, 0.76 percent in November and 0.68 percent in December. For the whole year, the CPI almost doubled the 2007 figure, a record increase over a decade, said the GSO. The fluctuations in CPI were attributed to the Government’s tightened monetary policy, the global economic recession and fluctuations in the world market. Tran Thi Hang, director of the GSO Trade Service and Price Department, described the CPI downturn in the year-end months as an “abnormal trend” as it was the time the purchasing power, as usual, should have been growing to herald the upcoming traditional New Year festival. Affirming that the CPI’s continuous declines cannot be considered as “deflation,” Hang, however, emphasized that the Government “needs to take actions” to prevent the trend from plunging further. Economists also voiced warnings of the CPI’s reverse growth and considered this a “big problem” in 2009. Acting director of the Vietnam Economics Institute Tran Dinh Thien said it would be very dangerous for relevant agencies to focus on fighting inflation and forgetting about the deflation threat. He pointed to the reality that the national economy and businesses have become almost exhausted after a time-consuming and costly struggle against inflation. To deal with the situation, Vu Dinh Anh, deputy director of the Finance Ministry’s Market and Pricing Research Institute, suggested that the existing monetary and credit policies be further applied flexibly in parallel with the investment and consumption stimulation policies. In doing so, tax reduction for businesses should be considered an important solution to spur domestic investment, Anh said. Recognizing the threat, the Government has recently launched a 100 trillion VND stimulus package, Cabinet members have also resolved to further implement five groups of urgent measures to curb an economic decline.
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
OTC MARKET 25 Dec: OTC Market Kept Frozen.
( Source: Sanotc)
There were almost no transactions on the OTC market except for some contracts among brokers for most liquid stocks such as MB, Eximbank. Some sellers kept being patient posting their orders hoping for some rare buyers interested in their offers. The only focus of the market today was Vietinbank’s IPO news which was scheduled to be released by the late afternoon today. In the monetary market, the new trading band of 3% was first applied today making USD and gold price jump up despite world gold price was down. USD/ Vietnam dong on the free market hit the high for few months to 1USD/ 17,500VND. SJC gold price was 17.5 million VND/ teal. OTC corporate news Phuong Nam Joint stock bank announced the record date on 31 December 2008 to pay dividends. The evident and bonus share rate will be decided at the next Shareholder General Meeting. Financial Lending No II company under Agriculture and Rural Development bank (ALCII) announced IPO of 13,354,100 shares on HOSE on 9 January 2009. The registration and deposited time is from 1 December 2008 to 2 January 2009. An Giang Coffee Joint Stock Company (ticker: AGC) announced adjustment of the first trading day on HaSTC. HaSTC agreed to allow AGC postponement of debut until 5 January 2009 instead of 26 December 2008.
26 Dec: OTC Market Completely Frozen
After 8 years of operation, never has OTC market been in such a stagnant as it is now. No transactions were recorded even among brokers. No stocks were traded even the most liquid ones such as MB or Eximbank. The market drained after Vietinbank IPO.
( Source: Sanotc) Vietnam's Oricombank raises capital base by a third
(Source: Sanotc)
Vietnam's Oricombank, 10 percent owned by France's BNP Paribas, said on Monday it had raised its registered capital by 32.4 percent to 1.47 trillion dong ($87 million) by issuing new shares. The unlisted Ho Chi Minh City-based bank, also known as Phuong Dong Commercial Bank, would issue 36.3 million new shares to shareholders registered by Dec. 27, it said in a statement. Registered capital determines the size of a bank's possible loans and deposits. Of Vietnam's 39 partly private banks, Oricombank and nine others have sold shares to foreign banks as they sought expertise and greater business opportunities in the country of 86.5 million. The number of Vietnamese people with a bank account has risen 36 percent this year to 15 million, or 17 percent of the population, and 13.4 million bank cards are now in circulation, the State Bank of Vietnam said last week. ($1=16,984 dong) (Reporting by Ho Binh Minh; Editing by Alan Raybould)
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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VietinBank Raises $64 Million in Initial Share Sale
Vietnam Bank for Industry & Trade, the nation’s fourth-biggest lender by assets, raised 1.09 trillion dong ($64 million) selling its shares in an initial public offering. The government sold 53.6 million shares in the state-owned bank, according to a statement posted on the Web site of the Ho Chi Minh City Stock Exchange. The average accepted price was 20,265 dong a share, higher than the minimum 20,000 dong required from bidders, the statement said. “Under the current situation of the market, the IPO of Vietinbank is considered as a big success,” Thai Dac Liet, deputy director of the exchange, said in a telephone interview today. “One of the most important factors is that the company set up a reasonable starting price.”
Hanoi-based Vietinbank pressed ahead with its share sale, approved by the government in September, even after the nation’s benchmark stock index became Asia’s worst performer this year. The VN Index has fallen 67 percent ( Source: Sanotc) since Jan. 1 and is headed for the biggest annual loss since Vietnam opened its first exchange in 2000. The bank’s 200 trillion dong of assets account for about 18 percent of the total for Vietnamese lenders, the central bank said in a Nov. 10 statement. Its registered capital is 13.4 trillion dong, the exchange said yesterday. The success of the Vietinbank IPO may be a “turning point” in Vietnam’s sharesale program, known in the country as equitization, according to Liet. Missed Target The Southeast Asian nation sold shares in 73 companies in the first 11 months, compared with a full-year target of 262, the Ministry of Finance said earlier this month. It will have to sell stakes in 948 companies from now until 2010, the Thoi Bao Kinh Te Vietnam newspaper reported this month. The equitization program is behind schedule because of “many difficulties” in the economy and “volatility” in the stock market, according to the finance ministry. Vietnam has slashed its economic growth target for this year to 6.7 percent from an earlier goal of as much as 9 percent. The central bank has cut its benchmark interest rate five times since Oct. 20, to 8.5 percent from 14 percent, to reduce borrowing costs and try to spur the economy. “The IPO of Vietinbank signals the government can successfully speed up the equitization process in 2009 as long as they have a reasonable level of pricing,” Liet said. Foreigners bought 874,397 of the 53.6 million Vietinbank shares, the exchange said. The highest bid at auction was 45,000 dong a share, while the lowest successful offer was 20,000 dong. The bank plans to sell a 6 percent stake to employees and so-called local strategic investors, and 10 percent to foreign strategic investors, Chairman Pham Huy Hung said Dec. 5. 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 Vietnam lures over 64 billion USD in FDI in 2008
Vietnam attracted 1,171 new foreign direct investment (FDI) projects with a total registered capital of over 60.2 billion USD in 2008, tripling last year’s figure, reported the Foreign Investment Department under the Ministry of Planning and Investment (MPI).
( Source: VNA) In December alone, the country licensed 112 FDI projects with a combined
registered capital of over 1.17 billion USD. The newly registered capital was mainly poured into the industrial and construction sectors, with 572 projects capitalized at over 32.6 billion USD, accounting for nearly 49 percent of the total number of projects and 54 percent of the total capital. The service sector ranked second with 554 projects with a combined registered capital of 27.4 billion USD, accounting for 47.3 percent and 45.4 percent, respectively. The remaining was injected into the agro-forestry-fishery sector. Most FDI projects licensed in 2008 were wholly foreign-invested, making up 75.3 percent of the total projects and 51.7 percent of the total capital. The projects’ average size reached 51.47 million USD, up sharply from previous years. This year, 311 existing projects registered to increase investment with additional capital of 3.74 billion USD, equivalent to the annual registered capital five years ago. In total, Vietnam attracted over 64 billion USD in both newly registered and additional FDI in 2008, doubling the figure from 2007. The volume of disbursed capital reached 11.5 billion USD, up 43 percent against last year. Malaysia topped the list of 50 countries and territories registering to invest in Vietnam this year with 55 projects capitalized at 14.9 billion USD. It was followed by Taiwan, Japan, Singapore and Brunei. Despite the Vietnamese economy’s difficulties in the year’s first months, FDI enterprises still saw improving business results with total yearly revenues of 50.55 billion USD, a 24.4 percent increase against last year. The figure included 24.46 billion USD in exports, accounting for 40 percent of the country’s total export turnover. However, the sector saw the largest import turnover of nearly 28.5 billion USD, leading to its trade deficit of 4 billion USD or 25 percent of the country’s figure. Over the past year, the sector generated jobs for more than 200,000 laborers, raising the total number of people working in FDI projects in the country to 1.47 million. According to the MPI, in the context of the global economic crisis, this year’s impressive figures in FDI attraction have proved the international business community’s continued confidence in Vietnam’s business environment and the government’s inflation control measures. The ministry, however, forecast that with the unprecedented global economic and financial crisis in the world history, Vietnam’s FDI attraction in the years to come will be very difficult and the volume of disbursed FDI capital may sharply decrease. Therefore, solving difficulties for FDI enterprises, both newly-licensed and operational projects, are defined as the focus of state management on foreign investment in 2009
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 Foreign invested projects approved
The PM has just given nod to the project on capacity increasing for planners and surveyors of underground water sources in urban areas. The project is granted with €1.1 million as non-refundable aid by Germany while the Ministry of Natural Resources and Environment will allocate the corresponding capital from its annual budget.
( Source: KTĐT) Deputy Prime Minister Pham Gia Khiem authorized Gia Lai Province to take
over the Japan-funded project on capacity upgrading in agricultural and rural development in the Central Highlands.
Toshiba establishes new VN manufacturing base
Toshiba Corporation announced yesterday that it would meet the growing demand for high-efficiency motors in the global market by establishing a new manufacturing and sales base in Viet Nam. The new company, Toshiba Industrial Products Asia Co Ltd will be located in Dong Nai Province, and will manufacture high-efficiency industrial motors rated at under 100 horsepower, plus their parts. The company will construct a factory on 8ha in Amata Industrial Park. Work is scheduled to begin April 2009. Operation is expected to start in September 2010. Total investment in facilities construction and manufacturing equipment is around US$77 million dollars. Toshiba selected Viet Nam as home to the new motor manufacturing base for reasons of the ability to secure talented human resources, and advantageous logistics to the worldwide market, particularly North America and Asia. The Amata Industrial Park also offers distinct advantages such as tried and tested site management, plus proximity to a modern harbor. The park's location close to HCM City, Viet Nam's largest city, with a population of over 6 million, will also assure access to qualified people. When the new facility reaches full capacity in 2015, it will be able to manufacture up to 1.2 million high-efficiency industrial motors a year, including key components, as required by the market. Key features of Toshiba high-efficiency motors include their low noise and low malfunction rate. As the new company ramps up its business, its initial product line will include parts for export to North America. It will subsequently start exports to China, Southeast Asia and Japan, toward achieving a US$210 million sales target by 2015. Alongside Toshiba's three existing manufacturing bases, Toshiba Industrial Products Manufacturing Corporation in Japan, Toshiba Dalian Co Ltd in China, and Toshiba International Corporation in the United States, Toshiba Industrial Products Asia Co Ltd will form a manufacturing and sales system serving the global market, Toshiba Group targets net sales of US$800 million for its motor business by 2015.
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
Page 16
M&A AND INTERNATIONAL INVESTMENT CONNECTION VIETNAM AND M & A TENDENCY Month sees rise in mergers, acquisitions
December has seen plenty of mergers and acquisitions but acquirers have been more intent on enhancing their market presence than making a financial investment. Watson Wyatt Worldwide, a global consulting firm, announced on Monday its acquisition of the private SMART Human Resource Vietnam Company with operations to start early next year. SMART HR, established in 2001 with offices in HCM City and Ha Noi, offers training and development consulting, talent management, compensation management and salary surveys. Andrew Heard, Watson Wyatt’s ASEAN managing director, refused to disclose the price, saying it "greatly strengthens our company’s presence in the ASEAN market and the Asia Pacific region".
( Source: VNS)
"By establishing operations in Viet Nam, we can provide our global and regional clients with world-class consultancy in one of Asia’s most dynamic emerging markets." Watson Wyatt Vietnam will have personnel in place to meet clients’ demands for international standard services to cement the position established by SMART HR, he said. Globally, Watson Wyatt offers consultancy in human capital, retirement and benefits, insurance and financial services and investment. Last week the US-based TBWA\Group announced it had purchased stake in the marketing, advertising, and communications firm Biz Solutions. Though the percentage of stake and value of the deal are not known, Biz Solution’s name has been changed to Biz TEQUILA. TEQUILA is a brand owned by TBWA. Ian Thubron, a vice president of TBWA\Asia Pacific, expected this integration to help create a leading communication company in Viet Nam, a country that is rapidly becoming a key market for the group. Phan Bich Ha, one of the founders of Biz Solutions and now managing director of Biz TEQUILA, said with support from TBWA the new company would have more foreign clients and a broader range of services. TBWA has a global clientele that includes Apple, McDonald’s, Michelin, Nissan, Singapore Airlines and Standard Chartered Bank. In another acquisition, Elf Gas Saigon, a joint venture between Saigon Construction Corp and French firm Total, has bought the Saigon Gas Holding Corp at an undisclosed price. This enables Total to add another 20 distributors to its network. "The acquisition will secure Total’s position as one of the leading LPG suppliers in Viet Nam, with an increase in the gas market share to 15 per cent," Thierry Pflimlin, senior vice-president of Total Oil Asia-Pacific, said. "Viet Nam is one of our key markets for development and this opportunity for growth fits well with our strategy in the region," he said.
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
Mergers and Acquisitions in Knowledge Enterprises (Part 6) Combination Once the deal is finalized, the integration team is faced with the challenge of combining both the operations and the culture of the two companies. As mentioned previously, a successful combination depends on the ability of the employees of both firms to be able to make sense of the merger and perceive the combination as a positive thing. While the management and integration teams assume the main role in this task, there are often times other individuals in the firm that can play a key part in influencing perceptions and aiding in the transfer of knowledge. These people are the previously mentioned employees, or knowledge transfer individuals, that exhibit the boundary-spanning, entrepreneurial behavior that is key to the creation of value from a merger. Managers of a firm involved in the combination phase of a merger should identify these key employees as the merger progresses. Once identified, it is important to make sure that these individuals understand the goals of the merger, that they see the merger in a positive light, and that they are able to make sense of the merger. Once on board, these employees should be positioned strategically in order to gain the most from their abilities. This strategic positioning should take place at all levels of the firm, from the mailroom to the boardroom. The goal of this strategic placement is to canvas the merged firm with individuals that are ready and willing to make the merger work. Because these individuals have the ability and desire to operate outside of their boundaries if necessary, in an ideal situation this boundary spanning activity will essentially create a web, stretching throughout the new firm. With the right people positioned strategically, the behaviors that these knowledge transfer individuals exhibit, including the ability to act quickly under pressure, think creatively about new products and services, behave flexibly when competitors strike, and take appropriate risks for appropriate rewards, will help ensure a successful integration...
(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 NewsLetter via e-mail. All right reserved. Tel:+84-43-6227724 Email:[email protected] Website:www.vni-connection.com
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