Vietnam merger and acquisition characteristics and issues

Abstract

The study used the 484 M&A transactions from 2003 to 2009 to conduct the Vietnam M&A descriptive statistics. The statistics shows that M&A activities became more and more popular in the recent years especially in the last 2 years. 2008 recorded nearly 170 transactions at the deals value US$ 1310 million. Financials was a top industry in M&A activities at Vietnam in both target and acquirer companies and still kept this position on the first quarter of 2009. M&A activities in Vietnam occurred almost in the private market in the past and until the last two years; the numbers of public transactions were sharply increasing and focused on the HOSE. M&A in Vietnam was friendly transactions with small and medium transactions size and diversification type. It shows that M&A in Vietnam focus on to improve and expand their business. Moreover, the second finding is that although M&A had a high growth in Vietnam in the recent years, it did not bring a significant value for the public target companies and their shareholders. Using the t-test statistics test the difference between the pre abnormal return and post abnormal return of 14 days surrounding the announcement days of 55 M&A events from 2005 to April 2009. The test result shows that, the post-event abnormal return is not higher than the pre-event abnormal return; therefore, M&A does not bring the value for target companies and target shareholders in the short term.