M&A activities in Vietnam are primarily governed by a framework of several key laws. Navigating these is the most critical part of any transaction.

• The Law on Enterprises (2020): This is the foundational law governing the establishment, operation, and restructuring of companies. It dictates the specific procedures for acquiring shares or capital contributions, as well as the mechanics of mergers (where one or more companies merge into another existing company) and consolidations (where two or more companies combine to form a new one).

• The Law on Investment (2020): This law is crucial for foreign investors. It outlines the conditions, procedures, and sectors subject to market entry restrictions. For any M&A transaction involving a foreign investor, this law determines whether an "M&A approval" (formally, the Approval for Capital Contribution, Share Purchase, or Capital Contribution Portion Purchase) is required from the Department of Planning and Investment.

• The Law on Competition (2018): This law regulates "economic concentrations," which include M&A. Transactions that meet certain notification thresholds—based on the total assets, revenues, transaction value, or combined market share of the parties in Vietnam—must be reported to the National Competition Commission (NCC) before completion. The NCC assesses whether the deal could significantly reduce competition in the market.

The Typical M&A Process in Vietnam

While specifics vary, a typical cross-border M&A transaction follows these general stages:

1. Preparation & Strategy: The buyer identifies potential targets and develops a valuation model. This stage often involves signing a Non-Disclosure Agreement (NDA) to begin preliminary information sharing.

2. Preliminary Agreement: The parties negotiate and sign a preliminary, often non-binding, agreement, such as a Letter of Intent (LOI) or Memorandum of Understanding (MOU). This document outlines the basic terms, price, and conditions for the deal.

3. Due Diligence (DD): This is an intensive investigation by the buyer into the target company. It is the most critical phase for identifying risks. Key areas include:

   • Legal DD: Reviewing corporate records, licenses, contracts, labor issues, and any pending litigation.

   • Financial & Tax DD: Auditing financial statements, verifying assets, and identifying potential tax liabilities.

   • Commercial DD: Analyzing the target's market position, customer base, and competitive advantages.

4. Transaction Agreement: Based on the DD findings, the parties negotiate the definitive contract, typically a Share Purchase Agreement (SPA) or Asset Purchase Agreement (APA). This legal document details all terms, conditions, representations, warranties, and closing requirements.

5. Regulatory Approvals: This stage runs in parallel with negotiations. The parties must secure all necessary government approvals, which may include:

   • M&A Approval: For the foreign investor, from the Department of Planning and Investment.

   • Competition Clearance: Notification to the National Competition Commission, if thresholds are met.

   • Specialized Licenses: Approval from specific ministries for deals in regulated sectors (e.g., banking, education, healthcare).

6. Closing: This is the final step where the transaction is formally completed. The buyer pays the purchase price, and the seller transfers the shares or assets. Corporate documents are updated, and the new ownership is registered with the relevant authorities.

7. Post-Merger Integration (PMI): After closing, the buyer begins the complex process of integrating the target's operations, culture, and systems into its own business.

M&A Market: Opportunities & Trends

The Vietnamese M&A market is considered one of the most dynamic in Southeast Asia. Key opportunities for investors are concentrated in the following sectors:

• Real Estate: Driven by new, more transparent Land and Housing Laws, this sector is booming. Industrial and logistics real estate is in high demand due to the manufacturing shift, while residential and commercial projects also attract significant capital.

• Healthcare & Education: A growing, affluent middle class is fueling demand for high-quality private healthcare and education. This has led to major investments in hospital chains, clinics, health-tech platforms, and private school systems (EdTech).

• Financial Services: Fintech (digital payments, P2P lending) and consumer finance are high-growth areas as Vietnam's digital economy expands.

• Consumer Goods & Retail: Investors are keen to tap into Vietnam's large, young population and rising discretionary income.

• Energy & Infrastructure: There is strong interest in renewable energy projects (especially solar and wind) as Vietnam aims to meet its green energy targets.

Leading M&A Support Firms

Engaging experienced advisors is essential for a successful transaction. The market is served by a mix of top-tier international and local firms.

Legal Advisory (Law Firms)

These firms are consistently ranked in the highest tiers for M&A in Vietnam by international legal directories like Chambers and Partners and asialaw.

• Band 1 / Outstanding:

  • VILAF (Vietnam International Law Firm): A top-tier local firm with extensive experience in large, complex M&A deals.

  • YKVN: Another leading Vietnamese firm known for its strong corporate and finance practice.

  • Baker McKenzie: A global powerhouse with a long-standing and highly-regarded presence in Vietnam.

  • Freshfields Bruckhaus Deringer: A premier international firm handling many of the country's most significant cross-border transactions.

Financial & Transaction Advisory

These firms provide crucial support in valuation, financial and tax due diligence, and post-merger integration strategy.

• KPMG: Known for its strong deal advisory and tax practices.

• EY (EY-Parthenon): A leader in transaction advisory services and strategy.

• PwC: Offers comprehensive services from due diligence to integration.

• Deloitte: A major player in M&A consulting, tax, and risk advisory.

• Alvarez & Marsal (A&M): A global firm specializing in operational due diligence and turnaround management.

VIETNAM MERGERS & ACQUISITIONS - LHD LAW FIRM

Lawyers is a consulting company specializing in business law. We provide professional consulting services specializing in the fields of business, intellectual property, contracts, commercial disputes.

Our lawyers and professionals have extensive experience which enables us to advise investors well and to represent them in all matters relating to mergers and acquisitions as well as joint venture matters, both foreign and domestic. Before you merge with or acquire another company you should consult with us concerning: