Vietnam's M&A market is attractive to Singaporean investors.

In mid-July, Levanta Renewables, a Singapore-based renewable energy company backed by Actis, announced it was acquiring a 28.7 MWp rooftop solar power project from subsidiaries of Tien Nga Corporation, one of Vietnam's leading logistics providers.

This is the largest rooftop solar power project in Dong Nai province, and also one of the largest rooftop solar power projects in Vietnam, covering an area of ​​nearly 200,000 m2 and expected to generate more than 34 GWh per year. The project will provide a source of green energy for the Vietnam Electricity Group (EVN).

Sudhir Nunes, CEO of Levanta Renewables, said: “This acquisition is a significant milestone in Levanta Renewables’ growth in Vietnam, demonstrating our diversification efforts across the industrial, commercial and utility markets. Adding wind and solar assets to our portfolio in Vietnam helps us move toward our goal of achieving 1.5 GW of operating capacity across Southeast Asia.”

Meanwhile, Rahul Agrawal, Regional Energy Director for Southeast Asia at Actis – a global investment fund for sustainable infrastructure development – ​​commented that the acquisition of this rooftop solar project marks a step forward for Levanta Renewables in its ambition to achieve an operating capacity of 1.5 GW. To accelerate Vietnam's energy transition, Levanta Renewables will provide clean, stable energy at competitive prices to commercial and industrial customers, contributing to Vietnam's economic growth.

In June, Sembcorp Solar Vietnam Pte Ltd, a wholly owned subsidiary of Sembcorp, announced the completion of its acquisition of majority stakes in three GELEX Group subsidiaries in the renewable energy sector. Following this transaction, Sembcorp added a total of 196 MW of operational solar and wind power capacity to its portfolio.

In addition, Sembcorp will also acquire a 73% stake in GELEX's fourth subsidiary, expected in the second half of 2024. This company owns a 49 MW hydropower plant. After completing all four transactions, Sembcorp's total renewable energy capacity in Vietnam will reach 455 MW, while the group's total renewable energy capacity globally will reach 14.4 GW.

Another Singaporean company, Great Master, also qualified to acquire 20% of the total charter capital of Trung Khoi Joint Stock Company - an industrial park developer in Quang Tri. Meanwhile, Singapore-based Atlantic, Gulf and Pacific LNG (AG&P) acquired 49% of the shares of Cai Mep LNG Terminal in Ba Ria - Vung Tau province.

Seck Yee Chung, Managing Partner at Baker McKenzie Vietnam, shared that foreign investors continue to be a key factor in Vietnam's M&A market, largely driven by strong interest in Vietnam as a growth market. Singapore maintains its position as one of the most active investors in Vietnam's M&A market.

According to data from the Ministry of Planning and Investment, in the first half of 2024, Singapore ranked third, after South Korea and China, among foreign investors conducting M&A activities in Vietnam, with 142 transactions worth approximately US$349 million.

“We believe that investors from Singapore will strengthen their portfolios by pursuing new strategic deals in Vietnam as an emerging market in Southeast Asia,” said Seck Yee Chung.

Trends in M&A in the healthcare sector

With the rise of the middle class and an aging population, leading to increasing demand for healthcare services, major deals in the healthcare sector are likely to continue in the coming period. Similarly, the real estate and construction sectors are also attractive thanks to the new legal framework, as well as the trend of relocating manufacturing facilities to Vietnam.

In the first half of 2024, Singapore ranked third, after South Korea and China, among foreign investors conducting M&A in Vietnam.

Amidst increasing production, demand for industrial and manufacturing real estate remains very high. This is evidenced by the transaction in which Keppel Corporation Ltd. and Keppel Vietnam Fund acquired a 49% stake in two adjacent residential projects in Thu Duc City from Khang Dien Group, with a total transaction value of approximately US$138 million.

Another potential area is energy and infrastructure, driven by efforts to transition to renewable energy, as well as Vietnam's commitment to achieving net-zero emissions by 2050 and the promulgation of the Power Development Plan VIII, added Seck Yee Chung.

Highlighting the factors driving M&A deals by Singaporean investors, Eric Johnson of Freshfields Bruckhaus Deringer law firm stated: “Singapore provides a significant source of foreign investment in emerging markets in Southeast Asia, including Vietnam. Singapore’s main investors include sovereign wealth funds, large energy and real estate companies, as well as Singapore-based venture capital funds. In the future, Singapore will continue to account for a significant share of foreign investment flows into Vietnam, as Singaporean companies and funds seek new growth opportunities in this market.”

According to Mr. Johnson, thanks to its position as a regional financial center, as well as the efficiency and predictability of its Common Law legal system and network of agreements, many companies from the US, Europe, Japan, and global private equity funds have invested in Vietnam through subsidiaries in Singapore or special purpose companies.

"Emerging technology companies in need of funding will establish parent companies in Singapore to facilitate efficient fundraising overseas from venture investors," Johnson added.