Merger and Acquisition (M&A) is a new tendency in Vietnam. In Binh Duong Province, Trung Nguyen Coffee and Vinamilk M&A is an example.Mai Huu Tin, Ph.D, who is Chairman of U&I Investment JSC, asserted that M&A is natural needs of enterprises and will be more popular in Vietnam and in Binh Duong Province in the future.

 

In the face of a recovering global economics, M&A opens up great chances for Vietnamese enterprises to approach strengths of management, finance, and business experience.

  

M&A will make enterprise stronger but still should be in strict inspection

By analyzing whether enterprises and investors would earn more benefits in M&A or in new investment projects, Mai Huu Tin, PhD put it that M&A brings about greater growth, bigger market shares, mutual strengths of human force, technology, management, and diversity of products and services.

 

“It is clear that benefits are more in M&A than in a newly establish enterprises,” said Mr. Mai Huu Tin.

 

M&A has many kinds with pros and cons. Enterprises may choose merging and acquisition which reduces their costs by simple legal procedures or securities buying or assets buying which may cost more.

 

However, Mai Huu Tin noted that despite benefits of M&A, there are still problems to be solved lying in differences in managerial cultures of the merger and the merged enterprises. As the matter of fact, he warned that without thorough investigation or research on detail data in negotiation, enterprises will be left unexpected.

 

Meantime, M&A will create models of giant enterprises with wider forces and strengths in general economics; however, in managerial perspectives, M&A may pose a risk of creating monopoly. Therefore, it should be fully beware that M&A may create business monopoly which monopolizes the market and influence consumers’ interest.

Currently, laws in Vietnam forbid M&A which may account for over 50% of the related markets. In fact, developed countries always organize inspection on M&A to prevent such risks, said Mai Huu Tin.

 

Reported by Thanh Son – Translated by Vi Bao