Tuoi Tre, Japanese newspaper to host M&A conference   Officials of Japan's Sumitomo and Vietnam's Tiki.vn pose for a photograph during a contract signing ceremony in Ho Chi Minh City. Tuoi Tre Tuoi Tre Newspaper and its Japanese counterpart Mainichi will co-host a conference on merger and acquisition next month, an event to mark the 40th anniversary of the establishment of diplomatic relations between Vietnam and Japan. The conference, titled M&A in Vietnam – Investment Attraction from Japan, will be held on November 12 in Tokyo. It will be supported by the Iwakaze Capital Inc and BWLaws. The event aims to provide information about the M&A market and the development trends of Japanese businesses and investors within Vietnam. It will be a venue for Vietnamese and Japanese businesses to meet and exchange, boosting the development of M&A between businesses within the two countries. The event is expected to attract 200 businesses, investment companies, and corporations from Japan and 30 Vietnamese businesses. In Vietnam, businesses that wish to attend the conference and seek partners at the event can contact the organizers by calling Ms. Trang of BWLaws at0938946936, or emailing Mr. Xuan Toan at kinhte@tuoitre.com.vn. They can also contact Tuoi Tre headquarters at 60A Hoàng Văn Thụ, P.9, Q.Phú Nhuận, TP.HCM. Hiroshi Nishiyama, managing director of Iwakaze Capital Inc, said the conference will open business channels between the two countries. Some 74 percent of Japanese businesses are seeking overseas investment opportunities via M&A, Nishiyama said, citing a recent survey. The survey also indicates that Vietnam stands behind China, India, Indonesia and Thailand in terms of countries in which Japanese investors do the most business. This means Vietnam has to compete with these four countries to attract investment from Japan, he said. More room to grow In an interview with Tuoi Tre, Nishiyama also expressed his belief that even though Japan already has the most and largest merger and acquisition deals with Vietnam, the M&A market between the two countries could have greater potential. More than 1,500 Japanese businesses are operating in Vietnam, some of which are world famous brands, but there is always room for more major Japanese companies to invest in Vietnam, he said. Even though the M&A market in Vietnam tends to grow and develop quickly, it still fails to reflect the full potential of the market. Last year saw some 17 M&A deals between Japanese and Vietnamese businesses, with a combined value of more than US$1 billion, according to Nishiyama. However, most of these deals were of low value, only about $5.7 million each. The only two deals of large value were that of Bank of Tokyo – Mitsubishi, which purchased a 20 percent stake of VietinBank at $743 million, and Sumitomo Life, which spent $341 million to buy a 18 percent stake of Bao Viet from HSBC. Most of the M&A deals this year have been of small values, and the Japanese director predicted that future M&A activities will follow this trend. The Iwakaze Capital Inc is arranging for two Japanese businesses to seek investment chances in Vietnam. One of them is seeking a local partner to establish a manufacturing plant, and the other is operating in the finance sector. Both of them are big Japanese firms. Hindrances Nishiyama said there are three main reasons that prevent the M&A market between Japan and Vietnam to live up to its potential. The first reason is that financial reports of Vietnamese businesses are sometimes vague and lack transparency, which negatively affects business negotiations. The legal system for M&A activities also has shortcomings. For instance, foreign investors are not allowed to have more than 49 percent stake in the listed companies, which prohibits them from significantly increasing their investment. As for the non-listed businesses, foreign investors still face difficulties with regulatory authorities when they plan to buy more than 49 percent stake. Consequently, it could take an investor five to ten years to find an adequate local partner. To sum it up, Nishiyama said only when the legal framework in Vietnam is clearer and more transparent will the country be attractive to foreign investors. He emphasized the necessity to remove the ‘unofficial fees’ that investors face when doing business in Vietnam, which do not exist in Japan. Nishiyama also said Japanese investors see potential in the services, food, distribution, retailing, logistics and education sectors in Vietnam. TUOITRENEWS