7 June 2010 | By: Mohamed Hairul Borhan

Vietnam is expected to experience a wave of mergers and acquisition (M&A) over the next few years as local enterprises begin restructuring themselves to capitalise on new opportunities that arose with the global economic recovery, said an official from the country’s Chamber of Commerce and Industry.

Speaking at a conference in Ho Chi Ming City, Nguyen The Hung, deputy chairman for the Chamber, said that M&A activities are expected to grow 30-40 per cent annually over the next few years. He added such acquisitions would enable Vietnamese firms to access corporate governance, financial expertise, technology, human resources and market information on a global scale.

He said that such M&As are necessary to improve the competitiveness of local firms since most of them are SMEs and usually need extra capital for production and trading. These companies also usually have low technology and poor human resources.

Mr Hung revealed that the number of M&As have been on the rise ever since they were allowed in 2000 and that the majority of them were in finance, banking and industrial production. Even then, he said that the potential for M&As in the Southeast Asian country remains huge and is still in the early development stage.

He added that the Vietnamese government would also have to amend laws to meet the increasing demand for M&A deals.