LookAtVietnam – A lot of businesses keep a hesitant outlook about the
merger and acquisition (M&A) which is booming in Vietnam.
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Vietnamese businesses simply think that M&A means a business is swallowed by
another, while they do not think that this is a business opportunity.
At a recent workshop on merger and acquisition, the owner of a consumer goods
production company said that he feels very sad when hearing that the owners of
some well known brands have sold the brands.
“I heard that the Saigon Paper, Diana and Xmen have been sold. It is so
difficult to set up a business and develop a brand, while it is too easy to sell
the brands,” he said.
This seems to be the thoughts of many other Vietnamese businesses. Doan Trong
Ly, Director of AProcimex, a feed production company, who has been working in
the business field for the last tens of years, said that a lot of foreign
investors have been eyeing his company, but he will not sell the company,
because he wants to build up strong Vietnamese brands.
“Some friends have advised me to sell the business and relax. However, I think
that I build up the business not to sell it and become a worker,” he said.
“I feel deep grief when hearing that 75 percent of the enterprises in the animal
feed industry are foreign invested which control the prices on the market,” he
continued.
Like Ly, other businessmen keep a negative outlook to the selling of stakes to
foreign partners, saying that when a business is sold, it is swallowed by
another.
However, economists say that in the current conditions, when businesses face a
lot of risks and difficulties, they need to take wise moves in order to survive
and develop, and that M&A should be seen simply as business opportunities.
“When you can sell your assets for a good price, this is a good bargain,”
experts say.
Cao Tien Vi, Chair of the Saigon Paper Corporation, which has sold 38 percent of
stakes to two Japanese partners, said that selling stakes is the chosen solution
which is hoped to help improve the business. He also said that the conservative
views and the persisting to follow old way of thinking may lead the business to
bankruptcy.
When talking about the M&A deal, Vi said that businessmen need to weigh pros and
cons before making decision. If a businessman insists on not selling stakes to
keep 100 percent of capital, he would make a great mistake if the business goes
bankrupted later.
Besides, businesses need to think about what is better, holding 100 percent of
capital of a small business, or holding 30 percent of a business which is much
bigger. They should also consider if they want the business just hold a certain
market share, or want the business to become the leader in the business field.
“When you hold 30 percent of capital instead of 100 percent, you will not be
able to make decisions yourself, while you have to consult with other members of
the board of directors. However, you gain what you pay,” he said.
Regarding the M&A deal, he said that it took Saigon Paper 3-5 years to
restructure the company, re-organize production before the stakes were sold.
The two Japanese partners who bought Saigon Paper’s stakes are Daio Paper
Corporation and BridgeHead investment fund. Daio is the third biggest paper
company in Japan and the 21st in the world with the annual turnover of five
billion dollars.
Do Anh Tu, General Director of Diana, which has sold 95 percent of stakes to
Japanese Unicharm, said that he wishes to see the company become an
international company whose brand gets well known worldwide.
Source: TBKTVN