VIETNAM – Mergers & Acquisitions Country Comparative Guide

1. What are the key rules/laws relevant to M&A and who are the key regulatory authorities?
There is no single document regulating M&A activities in Vietnam. The relevant rules are contained in several laws and regulations governing general corporate and investment issues. These laws and regulations include:
· Investment Law No. 61/2020/QH14 and Enterprise Law No. 59/2020/QH14 issued by the National Assembly on 17 June 2020, and their guiding documents, namely Decree No. 01/2021/ND-CP and Decree No. 118/2015/ND-CP. These laws set out the general legal framework, conditional sectors and investment procedures. The authorities responsible for enforcing these laws are the:
· Prime Minister;
· local People’s Committee;
· Ministry of Planning and Investment;
· Ministry of Industry and Trade;
· Ministry of Health; and
· Other ministries depending on the business activities of the target companies.
· Law on Securities No. 54/2019/QH14 issued by the National Assembly on 26 November 2019, and its implementing documents, in particular Decree No. 155/2020/ND-CP issued by the Government on 31 December 2020. This Law regulates the acquisition of shares in public and private companies in Vietnam, including public tender offers. The authorities responsible for enforcing the Law include the:
· State Securities Commission (SSC);
· Vietnam Securities Depository Centre; and
· Ministry of Planning and Investment.
· Competition Law No. 23/2018/QH14 issued by the National Assembly on 12 June 2018, which is enforced by the Vietnam Competition Authority (VCA). Under this Law, any M&A transaction that causes or may likely cause substantial anti-competitive effects on the Vietnamese market will be prohibited.
· Foreign exchange regulations. An investment capital account in Vietnamese dong is a condition, among others, for capital contribution/share purchase or subscription. These regulations are enforced by banks and the State Bank of Vietnam.
· Vietnam’s WTO Schedule of Specific Commitments on Services. This sets outs the ratio of shares that can be owned by foreign investors in various specific sectors.
· Other specific regulations for the acquisition of shares in Vietnamese companies operating in special sectors, such as banking and finance, insurance, and so on. These sectors are highly regulated by the relevant authorities.

2. What is the current state of the market?
Vietnam has remained an attractive destination for foreign investors: In 2020, the total FDI capital to Vietnam was USD28,53 billion. Investment in the form of capital increasement is the only increasing proportion of the total FDI that grew by 10,6%. Foreign investors contributed capital to domestic enterprises mainly in the field of processing technology and manufacturing (USD 13,6 billion) as well as water and energy sector (USD 5,1 billion).
Main investors still come from Japan, Korea, Singapore, and China. The retail, consumer goods, and real estate are also very active, and investors tend to focus on leading companies as they have a big market share and strong brand value.
The main drivers of Vietnam’s M&A market are:
· Privatization of state-owned enterprises (SOE). According to Resolution No. 01/NQ-CP issued by the Government in 2021, one of the key tasks in 2021 was to continue strengthening the restructuring, equitisation and divestment of SOEs. The government also aims to publicize equitized enterprises that are eligible but are not listed nor registered for trading on the stock market.
· Trade liberalization as a result of CPTPP, EU- Vietnam FTA, and so on.
· Resolution No. 42 on pilot program of handling bad debts of credit institutions is also the main driving force of M&A in real estate sector as bad debts in real estate sectors accounts for a high percentage of the total bad debts in Vietnam’s market.
Major deals:
· In the middle of June 2020, according to VinGroup, a group of investors led by KKR, including Temasek, spent VND 15,100 billion VND (USD 650 million) to buy more than 200 million shares of VHM, equivalent to 6 % shares of VinHomes (a subsidiary of VinGroup).
· On 9 April 2020, FWD Group announced its acquisition of Vietcombank Cardif Life Insurance Company (VCLI), a joint venture between Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) and BNP Paribas Cardif.
· At the end of June 2020, after approval by the State Bank, Orient Commercial Joint Stock Bank (OCB) successfully issued 86.68 million shares to Aozora Bank from Japan, through which Aozora officially became to become a foreign shareholder owning 15% of the capital. The estimated value is more than VND 3,100 billion.
OCB also officially increased its charter capital from VND 8,767 billion to VND 10,959 billion in October 2020.
· KEB Hana became a major shareholder of Vietnam Development Bank (BIDV) by acquiring 603.3 million shares, equivalent to 15% of BIDV’s capital, in November 2019
· Bao Viet Group has completed the private issuance of more than 41 million shares, approximately 6% capital, for Sumitomo Life Insurance Company (Sumitomo Life), a strategic shareholder from Japan.
· In early April 2020, Stark Corporation (Thailand) bought 100% of the shares (USD 240 billion) of Thinh Phat Electrical Cable Joint Stock Company (Thipha Cables) and JSC Non-ferrous Metal and Copper Plastic JSC. Vietnam (Dovina).
· In November 2019, Thai WHA Utility and Power Company purchased 34% of equity in Duong River Surface Water JSC.
· Mitsui & Co. (Japan) bought 35.1% of Minh Phu Seafood Corporation’s capital.
· In April 2019, DHG Pharma officially became a subsidiary of Taisho after this Japanese unit raised its holdings to 50.78% of total shares.

3. Which market sectors have been particularly active recently?
· Processing technology and manufacturing
· Renewable energy
· Water and waste treatment
· Pharmaceuticals
· Consumer retails

4. What do you believe will be the three most significant factors influencing M&A activity over the next 2 years?
The country’s deeper and wider integration into the world’s economy is offering new opportunities for M&A activities.
Another factor includes the high pressure faced by the government to privatise state-owned enterprises to meet requirements under signed trade pacts, especially the EU – Vietnam Free Trade Agreement, which came into force on 1 August 2020.
Encouraging signs for foreign investment include:
· Reformed policies to allow wider access to foreign investors.
· ASEAN Economic Community single market and production base.
· The conclusion of free trade agreements (FTAs), including the EU – Vietnam FTA and The Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).
· Vietnam’s super rich population is growing faster than anywhere else and is on track to continue leading the growth in the next decade.
· Equitization of state-owned enterprises will speed up.
The introduction of the new Investment Law, Enterprise Law, Resolution No. 42 on handling bad debts and other laws and policies are creating an improved legal environment for investment and trade in general, and the M&A market in particular. However, the following factors also affect M&A transactions:
· Divergent interpretations and implementations by local licensing authorities of international treaties such as Vietnam’s WTO Commitments.
· Different licensing procedures applied to different types of transactions (for example, for foreign invested companies and domestic companies, public companies and private companies, and for buying state-owned shares or private shares).
Although legal and governance barriers, along with macro instability and the lack of market transparency are still the greatest concerns for investors, M&A deals in Vietnam are still expected to be one of the key, effective channels for market entry.
The major expected trends in the Vietnam M&A market include:
· Bank restructurings.
· Acquisitions and anti-acquisitions, particularly in the real estate sector.
· Growing Korean, Japanese and Thai investment in Vietnam through M&A transactions.
· Reform of SoEs.

5. What are the key means of effecting the acquisition of a publicly traded company?
In Vietnam, the term public company refers to a joint stock company that meets one of the following conditions:
a) The company has a contributed charter capital of at least 30 billion VND and at least 10% of the voting shares are being held by at least 100 non-major shareholders; or
b) The company has successfully made its IPO by registration with SSC.
The most common means of obtaining control over a public company are as follows:
· The acquisition of shares/charter capital through:
· buying shares/charter capital from the existing shareholders of the company;
· buying shares/charter capital of a listed company on the stock exchange; and
· public share purchase offer.
· Through a merger. The 2020 Law on Enterprises sets out the procedures for company mergers by way of a transfer of all lawful assets, rights, obligations and interests to the merged company, and for the simultaneous termination of the merging companies.
· Through the acquisition of assets.
There are restrictions on the purchase of shares/charter capital of local companies by foreign investors in certain sensitive sectors. In addition, the law is silent on merger or assets acquisition (for example, business spin-off) transactions where a foreign investor is a party. Regarding other assets acquisition transactions, if the asset is a real property, foreign ownership right will be restricted according to real estate laws.
Securities of public companies must be registered and deposited at the Vietnam Securities Depository Centre before being traded.
Depending on the numbers of shares purchased, an investor can become a controlling shareholder. Under the Vietnam Law on Securities, a shareholder that directly or indirectly owns 5% or more of the voting shares of an issuing organisation is a major shareholder. Any transactions that result in more than 10% ownership of the paid-up charter capital of the securities company must seek approval of the State Securities Commission (SSC).

6. What information relating to a target company will be publicly available and to what extent is a target company obliged to disclose diligence related information to a potential acquirer?
There is no legal requirement that a bidder must keep information about the bid a secret until the bid is made. However, this can be considered a contractual violation if the parties to the transaction have committed to secrecy in writing. Leaking information before the finalisation of the bid can lead to:
· An increase of the target’s shares price.
· Difficulties in negotiating the terms of the transaction.
· Competition in the market.

7. To what level of detail is due diligence customarily undertaken?
Before officially contacting the potential target, the bidder conducts a preliminary assessment based on publicly available information. The bidder then contacts the target, expresses its intention of buying shares/subscribing for its shares and the parties sign a confidentiality agreement before the due diligence process. The confidentiality agreement basically includes confidentiality obligations in performing the transaction. The enforcement of confidentiality agreements by courts in Vietnam remains untested.
A bidder’s legal due diligence usually covers the following matters:
· Corporate details of the target and its subsidiaries, affiliates and other companies that form part of the target.
· Contingent liabilities (from past or pending litigation).
· Employment matters.
· Contractual agreements of the target.
· Statutory approvals and permits regarding the business activities of the target.
· Insurance, tax, intellectual property, debts, and land-related issues.
· Anti-trust, corruption and other regulatory issues.

8. What are the key decision-making organs of a target company and what approval rights do shareholders have?

It is necessary to obtain the approval of the general meeting of shareholders to carry out a tender offer if the acquisition is conducted by way of a transfer of shares from an existing shareholder and results in a 25% ownership or more of the voting shares in a public company. Such approval is also required when there is a share transfer of a founding shareholder of a joint stock company within three years from the issuance of the Enterprise Registration Certificate. The approval normally includes the:
· Number of shares offered.
· Price of the offer.
· Conditions of the offer.
There is no statutory requirement that prohibits a target board from soliciting or recommending other offers before completion of a transaction. However, in practice, the parties can agree on such restrictions.

9. What are the duties of the directors and controlling shareholders of a target company?

Shareholders of a public company shall:
a) Have the right to equal treatment;
b) Have accessibility to information periodically and irregularly published by the company as prescribed by law;
c) Have their the lawful rights and interests protected; have the right to request suspension or cancellation of a Resolution or decision of the General Meeting of Shareholders or Board of Directors as prescribed by the Law on Enterprises;
d) Not take advantage of the major shareholder’s status to influence rights and interests of the company and other shareholders as prescribed by law and the company’s charter; disclose information as prescribed by law;
dd) Have other rights and obligations prescribed by law and the company’s charter.

10. Do employees/other stakeholders have any specific approval, consultation or other rights?
There is no requirement under Vietnamese law that the employees must be consulted about the offer. However, if a layoff is to be conducted, the employer must:
· Prepare a labour usage plan.
· Consult with the employee representative.
· Notify the competent labour authority on the implementation of the labour usage plan.

11. To what degree is conditionality an accepted market feature on acquisitions?
A takeover offer usually contains the following conditions:
· The terms and conditions of the offer apply equally to all shareholders of the target.
· The relevant parties are allowed full access to the tender information.
· The shareholders have full rights to sell the shares.
· Applicable laws are fully respected.
An offer can also be subject to conditions precedent. Conditions precedent are set out in the share sale and purchase agreement or the capital contribution transfer agreement. There is no specific restriction on conditions precedent other than the requirement that they cannot be contrary to law and conflict with social ethics (although the legal definition of social ethics is unclear). The most common conditions precedent are:
· Amendments to the charter/relevant licence of the target.
· Obtaining necessary approvals to conduct the transaction.
· Changes to the target’s management body.
Payment of the contract price will only be made after the conditions precedent are met.

12. What steps can an acquirer of a target company take to secure deal exclusivity?
The acquirer can enter into an exclusivity agreement, terms sheet or letter of intent or MOU that includes a legally binding exclusivity clause. The acquirer can also make use of deal protection mechanisms such as:
· No Shop Provision: included in an agreement between the seller and the buyer that prevents the latter from seeking purchase proposals from third parties in a time frame after the signing of the Letter of Intent
· Termination or Breakup Fees: if the seller accepts a bid from a third party, then they will have to pay the original buyer a fee equivalent to the breakup fee
· Lock-ups: seller is given part-ownership of stock or important assets in the target company
· Stock options: allow the buyer to purchase a number of shares in the target company if a particular pre-agreed event occurs

13. What other deal protection and costs coverage mechanisms are most frequently used by acquirers?
Besides the aforementioned, a deal protection mechanism an acquirer can make use of is matching or topping rights where the seller has to notify the bidder of any third party proposal, and the seller is entitled to match or better such a proposal.
Cost coverage mechanisms include:
· Locked Box mechanism: where the seller and buyer agree on a net purchase price upfront in the Sales Purchase Agreement and this price remains effective until the financial closing/completion date of the transaction – recommended for fast-growing target companies
· Completion Account mechanism: base purchase price, plus cash, less debt, plus excess or less shortfall in working capital

14. Which forms of consideration are most commonly used?
Under Vietnamese law, shares can be purchased by offering cash, gold, land use rights, intellectual property rights, technology, technical know-how or other assets. In practice, acquisitions are most commonly made for cash consideration.

15. At what ownership levels by an acquiror is public disclosure required (whether acquiring a target company as a whole or a minority stake)?
The offer timetable is as follows:
· The bidder prepares registration documents for its public bid to purchase shares.
· The bidder sends the bid registration documents to the State Securities Commission (SSC) for approval and, at the same time, sends the registration documents to the target.
· The SSC reviews the tender documents within seven days.
· The bidder must publicly announce the tender offer within seven days from receipt of the State Securities Commission’s opinion regarding the registration of the tender offer
· The board of the target must send its opinions regarding the offer to the SSC and the shareholders of the target within 14 days from receipt of the tender documents.
· The bid is announced in the mass media (although this is not a legal requirement).
· The length of the offer period is between 30 and 60 days.
· The bidder reports the results of the tender to the SSC within 10 days of completion.
Companies operating in specific sectors (such as banking, insurance, and so on) can be subject to a different timetable.

16. At what stage of negotiation is public disclosure required or customary?
The bidder must publicly announce the tender offer within seven days from receipt of the State Securities Commission’s opinion regarding the registration of the tender offer

17. Is there any maximum time period for negotiations or due diligence?
There are no limitations (maximum or minimum) under Vietnam law on the time period in which the parties are required to conduct negotiations and/or due diligence.

18. Are there any circumstances where a minimum price may be set for the shares in a target company?
There are no general requirements under Vietnam law that set certain minimum price for shares in a target company.

19. Is it possible for target companies to provide financial assistance?
There is no general prohibition under Vietnam law on target companies providing financial assistance to acquirers. However, such provision of financial assistance to acquirers may result in breach of fiduciary duties of directors of the target company. In this regard, the directors of the target company should be mindful of their duties to the target company because, providing financial assistance to an acquirer may be considered to be harming the target company while benefiting the majority shareholders of the target company or the acquirer, depending on the nature of such assistance.

20. Which governing law is customarily used on acquisitions?
Buyer and sellers are free to decide on the governing law of the transaction agreements. Nevertheless, in deals that involve a Vietnamese target company, the governing law is customarily Vietnam laws.

21. What public-facing documentation must a buyer produce in connection with the acquisition of a listed company?
Shares can be bought before the bid announcement provided that the number of shares sold does not exceed the thresholds requiring a tender offer. A tender offer is required in the following cases:
· Purchase of a company’s circulating shares that result in a purchaser, with no shareholding or less than a 25% shareholding, acquiring a 25% shareholding or more.
· Purchase of a company’s circulating shares that results in a purchaser (and affiliated persons of the purchaser), with a 25% or more shareholding, acquiring a further 10% or more of circulating shares of the company.
· Purchase of a company’s circulating shares that results in a purchaser (and affiliated persons of the purchaser), with a 25% shareholding or more, acquiring a further 5% up to 10% of currently circulating shares of the company within less than one year from the date of completion of a previous offer.
There is no guidance on building a stake by using derivatives. In addition, the bidder cannot purchase shares or share purchase rights outside the offer process during the tender offer period.
The bidder must publicly announce the tender offer in three consecutive editions of one electronic newspaper or one written newspaper and (for a listed company only) on the relevant stock exchange within seven days from the receipt of the State Securities Commission’s (SSC’s) opinion regarding the registration of the tender offer. The tender offer can only be implemented after the SSC has provided its opinion and following the public announcement by the bidder.

22. What formalities are required in order to document a transfer of shares, including any local transfer taxes or duties?
Depending on whether the seller is an individual or a corporate entity, the following taxes will apply:
· Capital gains tax. Capital gains tax is a form of income tax that is payable on any premium on the original investor’s actual contribution to capital or its costs to purchase such capital. Foreign companies and local corporate entities are subject to a corporate income tax of 20%. However, if the assets transferred are securities, a foreign corporate seller is subject to corporate income tax of 0.1% on the gross transfer price.
· Personal income tax. If the seller is an individual resident, personal income tax will be imposed at the rate of 20% of the gains made, and 0.1% on the sales price if the transferred assets are securities. An individual tax resident is defined as a person who:
· stays in Vietnam for 183 days or longer within a calendar year;
· stays in Vietnam for a period of 12 consecutive months from his arrival in Vietnam;
· has a registered permanent residence in Vietnam; or
· rents a house in Vietnam under a lease contract of a term of at least 90 days in a tax year.
If the seller is an individual non-resident, he is subject to personal income tax at 0.1% on the gross transfer price, regardless of whether there is any capital gain.
Payment of the above transfer taxes is mandatory in Vietnam.

23. Are hostile acquisitions a common feature?
Hostile bids are neither defined nor regulated under Vietnamese law. There is also no express prohibition on this type of transaction. Recommended bids often outnumber hostile bids due to limited publicly available information about the target and reluctance to disclose information.
However, the number of hostile bids in Vietnam has been increasing since 2011, for example:
· Singapore-based Platinum Victory Ptl Ltd became Refrigeration Electrical Engineering Corp (REE)’s largest shareholder, accumulating a 10.2% interest in the company.
· Chile’s CFR International Spa acquired a 46% stake in healthcare equipment company Domesco Medical Import-Export Co (DMC), making it the first foreign deal in the pharma sector.
During 2010 and 2011, there were two takeover deals in Vietnam:
· The acquisition of Ha Tay Pharmacy in 2010.
· The acquisition of Descon, a construction company, in 2011. Binh Thien An Company acquired a 35% shareholding in Descon, officially took over Descon and made significant changes to its management body.
The Government’s Decree No. 155/2020/ND-CP lifted the foreign equity cap regarding public companies, with some exceptions (a 49% cap was previously in force). Specifically, the rules on foreign ownership in a listed company can be generally classified into the five following groups:
· If Vietnamese law, including international treaties, provides for a specific ownership cap, the maximum foreign ownership (MFO) must not exceed such a cap (group 1).
· If Vietnamese law treats a business activity as conditional on foreign investment (pursuant to the list of conditional sectors under the Investment Law) but does not yet provide any ownership limit, MFO must not exceed 50% (group 2).
· In cases that do not fall within group 1 and group 2, MFO can be up to 100% (group 3).
· In case a public company operates in multiple industries and trades with different regulations on the foreign ownership rate, the foreign ownership rate must not exceed the lowest level in the industries and trades with determined foreign ownership rates (group 4).
· Where a public company decides on the maximum foreign ownership ratio lower than the rate specified above, the specific rate must be approved by the General Meeting of Shareholders and included in the company’s charter.
This lift of the foreign equity cap can introduce more hostile bids in Vietnam.

24. What protections do directors of a target company have against a hostile approach?
There are no provisions regulating hostile bids under Vietnamese law.

25. Are there circumstances where a buyer may have to make a mandatory or compulsory offer for a target company?
A tender offer is required in the following cases:
· Purchase of a company’s circulating shares that result in a purchaser, with no shareholding, or less than a 25% shareholding, acquiring a 25% shareholding.
· Purchase of a company’s circulating shares that results in a purchaser (and affiliated persons of the purchaser), with a 25% or more shareholding, acquiring a further 10% or more of circulating shares of the company.
· Purchase of a company’s circulating shares that results in a purchaser (and affiliated persons of the purchaser), with a 25% shareholding or more, acquiring a further 5% up to 10% of currently circulating shares of the company within less than one year from the date of completion of the previous offer.

26. If an acquirer does not obtain full control of a target company, what rights do minority shareholders enjoy?
Minority shareholders continue to enjoy full rights as shareholders, such as voting rights and rights to receive distributions of dividends. However, as shareholders may only participate in the management of a company indirectly through a shareholders’ resolution, minority shareholders have limited right to affect the management of the company.
Under Enterprise Law 2020, a shareholder or group of shareholders that holds at least 5% of the ordinary shares (or a smaller ratio specified in the company’s charter) shall have the rights to:
a) Access, extract the minutes of meetings, resolutions and decisions of the Board of Directors, mid-year and annual financial statements, reports of the Board of Controllers, contracts and transactions subject to approval by the Board of Directors and other documents except those that involve the company’s business secrets;
b) Demand that a GMS be convened in case
· the Board of Directors seriously violates the shareholders’ rights, obligations of executives or issues decisions ultra vires;
· other cases prescribed by the company’s charter.
c) Request the Board of Controllers to investigate into specific matters relevant to the company’s administration where necessary

27. Is a mechanism available to compulsorily acquire minority stakes?
If the bidder acquires 80% or more of the shares of a public company, it must buy the remaining shares of the same type of other shareholders (if they so request) at the bid price within 30 days. However, there are no “squeeze-out” rights that can force the remaining shareholders to sell their shares.

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For more information on the above, please do not hesitate to contact the author Dr. Oliver Massmann under omassmann@duanemorris.com. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC, Member to the Supervisory Board of PetroVietnam Insurance JSC and the only foreign lawyer presenting in Vietnamese language to members of the NATIONAL ASSEMBLY OF VIETNAM.

VIETNAM — Mergers and Acquisitions — Market overview — Vietnamnews interviewing Dr. Oliver Massmann

1. What is your assessment of the M&A market in Vietnam?

Covid-19 has significantly reduced M&A activities both globally and locally in our country. With the extraordinary pandemic control, Vietnam is still emerging as a safe, attractive destination for foreign investors.

Remarkable M&A deals during the Covid-19 outbreak include the merger of VinCommerce into Masan, the acquisition of 15% of BIDV’s charter capital worth USD 878 million by KEB Hana Bank (Korea), or the acquisition of Vinhomes’ shares worth USD 650 million by KKR and Temasek.

The main industries attracting M&A deals in Vietnam from June 2019 to October 2020 are real estate, banking and finance, logistics, pharmaceutical and healthcare, and construction.

M&A activities did slow down due to the pandemic but is expected to resume its activeness in the first quarter of 2021 at earliest.

2. What is the main driver of growth of M&A activities in Vietnam, especially during the Covid-19 period?

(i) Vietnam has entered into many free trade agreements (FTAs), which help to attract investment waves from abroad. FTAs such as the CPTPP, EVFTA, EVIPA and most recently RCEP will open up more opportunities to draw in investment in the form of M&A in various sectors, especially those that require the application of high-technology such as waste-to-power energy or water treatment.

(ii) The implementation of the new Securities Law, Investment Law and Enterprise Law 2020 are also identified as an important milestone, contributing to the simplification and synchronization of relevant administrative and legal procedures. For instance, under the new Investment Law taking effect on 1 January 2021, the foreign investor threshold is lowered from 51 percent to 50 percent. In addition, the law removes the need for approval if the M&A transaction does not increase the foreign investor’s ownership ratio in the target company.

(ii) The new Government administration in Vietnam is expected to comprise of younger people with more political willingness to integrate Vietnam to the world.

3. Which are difficulties that The M&A market of Vietnam has to face in the Covid-19 pandemic?

_ Review of the purchase target: if key customers and suppliers of the target company negatively affected, potential purchaser may question the efficiency of the business model
_ Adjustment on purchase price: price agreed before the pandemic occurs are most likely based on historically high evaluations and maybe reduced upon further examination of Covid-19’s effect on the target’s operation
_ Purchase is delayed due to reduced to none site travel: For many deals, site inspection is essential for potential partners to verify information and conclude their purchase
_ Increased risk of technology fraud: e-signature can be faked, confidential information is leaked (e.g. via Zoom)
_ Dramatic reduction in stock market prices have left investors with uncertainties regarding capital market transactions

4. There is a saying that SMEs will have more benefits than a big enterprise. What do you think about that?

I think the benefits are distributed in different ways for SMEs and for large corporates. However, when looking at the Covid-19 instance, I’d say large enterprises have more benefits.

Large enterprises last against the economic downturn longer due to larger capital reserve and brand presence while we see a lot of SMEs shutting down. However, higher number of human resources also means higher expenses for large corporates. The Covid-19 outbreak, in some ways, can be said to allow large corporates and multinational companies to relocate their business operation to provinces/countries that prove to handle extraneous factors well. For example, we have seen a lot of companies relocating their production plants from China to Vietnam during the corona crisis.

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For more information on the above, please do not hesitate to contact the author Dr. Oliver Massmann under omassmann@duanemorris.com. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC, Member to the Supervisory Board of PetroVietnam Insurance JSC and the only foreign lawyer presenting in Vietnamese language to members of the NATIONAL ASSEMBLY OF VIETNAM.

Vietnam Investment Review interviewing lawyer in Vietnam Dr. Oliver Massmann on trends in Mergers and Acquisitions in Vietnam

1. How do you judge the M&A trends in Vietnam at the current time?

The M&A market in Vietnam since the beginning of this year is very active. Foreign investors tend to invest in public listed companies or companies with good brand in the market. Sectors that attract the most interest of foreign investors are finance, real estate, retail, consumer goods, etc.
The reason is that the investors are very optimistic about the development of Vietnam’s market. In addition, the Government has also made several successful attempts to improve the investment environment, including the consideration for the amendment of the Law on Securities, which is believed to bring better financial sources to the country.

2. What should foreign investors benefit from the trends and what should they be aware of?

The Government’s privatization of many state-owned enterprises this year together with the fact that many enterprises with large capitalization and of great interest to foreign investors in these sectors are now preparing for the public listing give foreign investors more investment choices. However, they should conduct a full due diligence on the target to make sure that their investment is secured and in compliance with Vietnam laws.

3. What are still the shortcomings of the M&A deals in Vietnam?

Transparency is a barrier to foreign investors. The local target companies do not adopt international accounting standards or the equivalent, or are not willing to disclose sensitive information to their potential partners. In certain cases, for example, in real estate development projects, under table expenses are of great concern to foreign investors, especially those from the US, EU, UK, Japan and Korea.

4. Many people keep worry of the loss for not only local brands but also the local culture with more foreign domination after the M&A. What are your opinions about the matter?

It should not be of great concern. Foreign investors when buying in local companies/ brands usually bring technology, high-quality management standards and capital, which local companies lack. This helps the local companies/ brands better compete in the market, especially in case of Vietnam’s deep integration into the world and regional economy. Moreover, culture is something that foreign investors have to adapt to be able to survive in Vietnam. The case of Grab and Uber is an example.

5. What is the forecast of the trend in the future? And how they will drive the market?

Leading enterprises with good financial capacity and high growth in the sectors will attract both foreign and domestic investment. It is noted that in 2018, there will be a number of state-owned enterprises privatized under the Prime Minister’s decision. These enterprises include Habeco, Vinamilk, etc. which is believed to be successfully privatized following the recent success of Sabeco, another state-owned enterprise in the beverage sector under the Ministry of Industry and Trade’s management.
In terms of capital sources, we can expect a cash flow coming from major Asian economies such as Japan, Korea, Singapore, Hong Kong and especially mainland China which increases their strong presence in the market.
We strongly believe that the equitisation of SOEs of a larger scale and with a strong determination from the top would play a key role in driving the market.

If you have any question on the above, please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com or any other lawyer in our office listing. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

Rechtsanwalt in Vietnam Dr. Oliver Massmann ÖFFENTLICHE FUSIONEN UND ÜBERNAHMEN

Vietnam ist ein attraktives Ziel für ausländische Investoren geblieben. Im Jahr 2017 beläuft sich das gesamte ausländische Direktinvestitionskapital (Foreign Direct Investment “FDI”) fuer Vietnam auf 35,88 Mrd. USD, ein Anstieg um 44,4% im Vergleich zum Vorjahr. Von 35,88 Mrd. USD FDI entfielen 6,19 Mrd. USD auf 5.002 M&A-Transaktionen, ein Anstieg um 45,1% gegenüber dem Vorjahr
Der Immobiliensektor ist nach wie vor ein sehr attraktiver. 1,5 Mrd. USD wurden ueber M&A in den Markt eingebracht, was in diesem Jahr den Rekord darstellt. Wohnen ist nach wie vor eines der attraktivsten Segmente. Auch das gewerbliche Segment, insbesondere Büroflächen werden sind von stärkerem Interesse. Die Hauptanleger kommen weiterhin aus Japan, Korea, Singapur und China. Der Einzelhandel, Konsum- und Industriegueter sind ebenfalls sehr aktiv und die Anleger neigen dazu, sich auf fuehrende Unternehmen zu konzentrieren, da sie einen grossen Marktanteil und einen starken Markenwert haben.
Haupttreiber von Vietnams M&A-Markt sind:
• Privatisierung staatseigener Unternehmen. Es wird prognostiziert, dass es in 2018 ungefähr 8-10 grosse Privatisierungsgeschaefte, darunter der Verkauf von 24,86% der Anteile von Petrolimex, 20% der Anteile der Aviation Corporation of Vietnam, 53,48% der Staatsanteile an der Vietnam Textile Group, 57,92% der Staatsanteile an der Vietnam Steel Corporation und 49% von PV Oil, geben wird. Hanel, Viglacera, Lilama sind auch in der Liste fuer Privatisierung aufgeführt.
• Handelsliberalisierung als Folge von CPTPP, EU- Vietnam FTA, etc.
• Die Resolution Nr. 42 des Pilotprogramms zum Umgang mit Forderungsausfaellen von Kreditinstituten ist ebenfalls die Hauptantriebskraft fuer M&A im Immobiliensektor, da Forderungsausfaelle in diesem Sektor einen hohen Prozentsatz der gesamten uneinbringlichen Forderungen des vietnamesischen Markts ausmachen.
Nennenswerte Geschaefte in 2017 sind die Folgenden:
• Im Jahr 2017 zeigt der Markt einige M&A Geschaefte in staatseigenen Unternehmen, in denen die Privatisierung von der Regierung stark herangetrieben wird. Das nennenswerteste und erfolgreichste Geschaeft zur Privatisierung des Jahres ist, dass Vietnam Beverage – ein Unternehmen eines thailaendischen Milliardaers, der ThaiBev verwaltet, mehr als 53% der Anteile von Sabeco – einem Unternehmen, das dem Ministerium fuer Industrie und Handel gehoert – fuer USD 5 Mrd. kauft.
• Im Dezember 2017 erwarb die Shinhan Bank Vietnam Ltd. (“Shinhan Bank Vietnam”) das Einzelhandelsgeschaeft der ANZ Bank (Vietnam) Limited. Diese erfolgreiche Transaktion wurde sowohl als ein grosser Schritt fuer die Entwicklung der Shinhan Bank Vietnam im vietnamesischen Markt, als auch als ein schnelles Wachstum des vietnamesischen Privatkundengeschaefts in der kommenden Zeit angesehen.
• Mitte November 2017 kaufte Jardine Cycle & Carriage Limited (JC&C) ueber Platinum Victory Pte. Ltd. 5,53 % der Anteile von Vinamilk fuer 616,6 Mio. USD.
• Im Juni 2017 kaufte die Alibaba Group zusaetzliche Aktien von Lazada fuer 1 Mrd. USD und erhoehte damit ihre Anteile an Lazada auf 83%.
• Im Juli 2017 kaufte Sea Limited (Singapur) 82% der Anteile von der Food Corporation zu 64 Mio. USD.
• Im November 2017 kaufte JD.com Anteile von Tiki JSC fuer 44 Mio. USD.
• Im Januar 2018 kaufte Creador (ein privater Investmentfonds mit Sitz in Kuala Lumpur) 35% der Anteile der Mobile World Investment JSC fuer 43 Mio. USD.
• Synnex Technology International kaufte 30% der Anteile des FPT-Einzelhandels und 47% der Anteile des FPT-Handels von der FPT Corporation fuer rund 41 Mio. USD.
• Shinhan kooperierte mit Vinacapital um 100 Mio. USD in Novaland zu investieren.
Wie erhaelt man die Kontrolle ueber eine Aktiengesellschaft
Die gaengigsten Mittel zur Kontrolle ueber eine Aktiengesellschaft sind:
o Der Erwerb von Aktien/ Gruendungskapital durch:
o Den Kauf von Aktien / Gruendungskapital von den bestehenden Aktionaeren der Gesellschaft
o Den Kauf von Aktien / Gruendungskapital einer boersennotierten Gesellschaft an der Boerse; und
o Ein oeffentliches Kaufangebot.
o Durch eine Fusion. Das Unternehmensgesetz von 2014 legt die Verfahren fuer Unternehmensfusionen durch die Uebertragung aller rechtmaessigen Vermoegenswerte, Rechte, Verpflichtungen und Interessen auf die fusionierte Gesellschaft und die gleichzeitige Aufloesung der sich verschmelzenden Gesellschaften fest.
o Durch den Erwerb von Vermoegenswerten.
Es gibt Beschraenkungen fuer den Kauf von Aktien / Gruendungskapital von lokalen Unternehmen durch auslaendische Investoren in bestimmten sensiblen Sektoren. Darueber hinaus schweigt das Gesetz ueber Fusionen oder den Erwerb von Vermoegenswerten (z. B. Unternehmensausgliederungen), bei denen ein auslaendischer Investor eine Partei ist. In Bezug auf den Erwerb anderer Vermoegenswerte wird, wenn der Vermoegenswert eine Immobilie ist, das auslaendische Eigentumrecht nach den Immobiliengesetzen beschraenkt werden.

Wertpapiere von Aktiengesellschaften muessen vor dem Handel im Vietnam Securities Depository Center registriert und hinterlegt werden.
Abhaengig von der Anzahl der erworbenen Aktien kann ein Investor zum Mehrheitsaktionaer werden. Nach dem vietnamesischen Wertpapiergesetz ist ein Aktionaer der direkt oder indirekt 5% oder mehr der Stimmrechte einer ausstellenden Organisation besitzt, ein Hauptaktionaer. Alle Transaktionen, die zum Besitz von mehr als 10% des einbezahlten Satzungskapitals der Aktiengesellschaft fuehren, muessen die Zustimmung der State Securities Commission (SSC) einholen.
Was ein Bieter im Allgemeinen klaeren sollte, bevor er ein Gebot abgibt
Vor der offiziellen Kontaktaufnahme mit der potenziellen Zielgesellschaft, fuehrt der Bieter eine vorlaeufige Bewertung auf der Grundlage oeffentlich zugaenglicher Informationen durch. Der Bieter kontaktiert dann die Zielgesellschaft, aeussert seine Absicht, Aktien zu kaufen / Anteile zu zeichnen und die Parteien unterzeichnen eine Vertraulichkeitsvereinbarung vor dem Due Diligence-Prozess. Die Vertraulichkeitsvereinbarung beinhaltet grundsaetzlich Vertraulichkeitsverpflichtungen bei der Durchfuehrung der Transaktion. Die Durchsetzung von Vertraulichkeitsvereinbarungen durch Gerichte in Vietnam ist noch nicht erprobt.
Die rechtliche Due Diligence eines Bieters umfasst normalerweise folgende Angelegenheiten:
• Unternehmensdetails des Ziels und seiner Tochtergesellschaften, verbundener und anderer Unternehmen, die Teil des Ziels sind.
• Eventualverbindlichkeiten (aus vergangenen oder anhängigen Rechtsstreitigkeiten).
• Beschaeftigungsangelegenheiten.
• Vertragliche Vereinbarungen des Zielunternehmens.
• Gesetzliche Genehmigungen und Genehmigungen hinsichtlich der Geschaeftstaetigkeit des Zielunternehmens.
• Versicherungen, Steuern, geistiges Eigentum, Schulden und landbezogene Fragen.
• Kartell-, Korruptions- und andere regulatorische Fragen.
Beschraenkungen fuer Aktienuebertragungen von wichtigen Aktionaeren
Innerhalb der ersten drei Jahren nach Ausstellung des Enterprise Registration Certificates koennen nur Gruendungsaktionaere ihre Aktien auf andere Gruendungsaktionaere der Gesellschaft uebertragen. Danach koennen die Aktien frei uebertragen werden. Eine interne Zustimmung der Hauptversammlung ist immer erforderlich, wenn:
• Die Gesellschaft ihr Kapital durch die Ausgabe neuer Aktien erhoeht.
• Wenn innerhalb der oben genannten drei Jahre eine Uebtertragung zwischen den Gruendungsaktionaeren besteht.
Handelt es sich bei dem Kauf und Verkauf um eine direkte Vereinbarung zwischen der Gesellschaft und dem Verkaeufer in Bezug auf eine Aktienausgabe, muss der Verkaufspreis niedriger sein als der Marktpreis zum Zeitpunkt des Verkaufs oder, falls kein Marktpreis vorliegt, der Buchwert der Aktien zum Zeitpunkt des Genehmigungsplans zum Verkauf der Aktien. Darueber hinaus muss der Verkaufspreis fuer auslaendische und inlaendische Kaeufer gleich sein.
Wann eine Angebotsausschreibung erforderlich ist
Eine Angebotsausschreibung ist in den folgenden Faellen erforderlich:
• Kauf von sich im Umlauf befindlichen Aktien eines Unternehmens, die dazu fuehren, dass ein Kaeufer ohne oder mit einer Beteiligung weniger als 25% eine Beteiligung von mindestens 25% erwirbt.
• Kauf von sich im Umlauf befindlichen Aktien eines Unternehmens, die dazu fuehren, dass ein Kaeufer (und dem Kaeufer nahestehende Personen) mit einer Beteiligung von 25% oder mehr weitere 10% oder mehr der sich im Umlauf befindlichen Aktien der Gesellschaft erwirbt.
• Kauf von sich im Umlauf befindlichen Aktien eines Unternehmens, die dazu fuehren, dass ein Kaeufer (und dem Kaeufer nahestehende Personen) mit einer Beteiligung von 25% oder mehr innerhalb von weniger als einem Jahr seit dem Abschluss eines frueheren Angebots weitere 5% bis zu 10% der sich derzeit im Umlauf befindlichen Aktien des Unternehmens erwirbt.
Es gibt keine Anleitung fuer den Beteiligungsaufbau durch den Einsatz von Derivaten. Darueber hinaus kann der Bieter waehrend des Ausschreibungszeitraums keine Aktien oder Rechte ausserhalb des Angebotsprozesses erwerben.
Der Bieter muss das Uebernahmeangebot innerhalb von sieben Tagen nach Eingang der Stellungnahme der State Securities Commission (SSC) bezueglich der Registrierung des Uebernahmeangebots in drei aufeinanderfolgenden Ausgaben einer elektronischen Zeitung oder einer schriftlichen Zeitung und (nur fuer eine boersennotierte Gesellschaft) an der betreffenden Boerse oeffentlich bekannt geben. Das Uebernahmeangebot kann erst nach der Stellungnahme des SSC und nach der oeffentlichen Bekanntmachung durch den Bieter umgesetzt werden.
Das Gebot oeffentlich machen
Der Angebotszeitplan sieht wie folgt aus:
• Der Bieter bereitet die Registrierungsunterlagen fuer sein oeffentliches Angebot fuer den Kauf von Anteilen vor.
• Der Bieter sendet diese Registrierungsdokumente zur Genehmigung an die SSC und gleichzeitig an das Zielunternehmen.
• Die SSC prueft die Angebotsungsunterlagen innerhalb von sieben Tagen.
• Der Vorstand des Zielunternehmens muss innerhalb von 14 Tagen nach Erhalt der Angebotsunterlagen der SSC und den Aktionaeren des Zielunternehmens seine Meinung zum Angebot mitteilen.
• Das Gebot wird in den Massenmedien verkuendigt (obwohl dies keine gesetzliche Verpflichtung ist).
• Die Angebotsdauer betraegt zwischen 30 und 60 Tagen.
• Der Bieter teilt der SSC die Ergebnisse des Angebots innerhalb von 10 Tagen nach Fertigstellung mit.
Unternehmen, die in bestimmten Sektoren (wie Banken, Versicherungen usw.) taetig sind, koennen einem anderen Zeitplan unterliegen.
Angebotsbedingungen
Ein Uebernahmeangebot enthaelt normalerweise folgende Bedingungen:
• Die Angebotsbedingungen gelten fuer alle Aktionaere des Zielunternehmens gleichermassen.
• Die entsprechenden Parteien haben vollen Zugang zu den Ausschreibungsinformationen.
• Die Aktionaere haben das volle Recht, die Aktien zu verkaufen.
• Anwendbare Gesetze werden vollständig respektiert.
Ein Angebot kann auch aufschiebenden Bedingungen unterliegen. Aufschiebende Bedingungen sind im Aktienkaufvertrag oder im Kapitalumlagevertrag festgelegt. Es gibt keine besondere Einschraenkung fuer aufschiebende Bedingungen ausser der Anforderung, dass sie nicht gegen Gesetze verstossen und der Sozialethik widersprechen koennen (obwohl die rechtliche Definition der Sozialethik unklar ist). Die haeufigsten aufschiebenden Bedingungen sind:
• Aenderungen der Charta / relevanten Lizenz des Zielsunternehmens.
• Erlangung notwendiger Genehmigungen zur Durchfuehrung der Transaktion.
• Aenderungen im Leitungsorgan des Zielunternehmens.
Die Zahlung des Vertragspreises erfolgt erst nach Erfuellung der aufschiebenden Bedingungen.
Mitarbeiterberatung
Nach dem vietnamesischen Recht ist es nicht erforderlich, dass die Mitarbeiter zu dem Angebot konsultiert werden. Wenn jedoch eine Entlassung erfolgen soll, muss der Arbeitgeber:
• Einen Arbeitskraftnutzungsplan vorbereiten.
• Den Arbeitnehmervertreter konsultieren.
• Die zustaendige Arbeitsbehoerde ueber die Umsetzung des Arbeitskraftnutzungsplans in Kenntnis setzen.
Form und Mindestmass der Beteiligung
Nach vietnamesischem Recht koennen Anteile erworben werden, indem Bargeld, Gold, Landnutzungsrechte, Rechte an geistigem Eigentum, Technologie, technisches Know-how oder andere Vermoegenswerte angeboten werden. In der Praxis erfolgt der Erwerb meist gegen Geldleistung getaetigt.
Im Falle eines vollstaendigen Erwerbs von Staatsunternehmen darf die erste Zahlung fuer den Anteilserwerb nicht weniger als 70% des Wertes dieser Anteile betragen, wobei der verbleibende Betrag innerhalb von 12 Monaten gezahlt werden muss.
Bei Transaktionen, bei denen Aktien von staatlichen Unternehmen versteigert werden, muss der Kaeufer mindestens fuenf Arbeitstage vor dem genannten Auktionstermin eine Anzahlung in Hoehe von 10% des Wertes der zur Zeichnung angemeldeten Aktien auf Grundlage des Mindestpreises leisten. Darueber hinaus hat der Kaeufer das gesamte Entgelt fuer die Aktien innerhalb von zehn Arbeitstagen nach Bekanntgabe der Auktionsergebnisse auf das Bankkonto der erteilenden Stelle zu ueberweisen.
Im Falle eines oeffentlichen Uebernahmeangebots muessen die Zahlung und die Uebertragung von Anteilen ueber eine Wertpapierhandelsgesellschaft, die als Beauftragte fuer das oeffentliche Kaufangebot bestellt wurde, entsprechend dem Dekret 58/2012 / ND-CP, erfolgen.
Ein Unternehmen von der Liste nehmen (Delisting)
Wenn ein Unternehmen freiwillig die Streichung von der Liste beantragt, muss es einen Antrag auf Streichung der Liste stellen, der folgende Dokumente enthaelt:
• Einen Antrag fuer das de-listing.
• Fuer eine Aktiengesellschaft:
o die Zustimmung der Hauptversammlung zur Streichung der Aktie;
o die Zustimmung des Vorstandes zur Streichung von Anleihen; und
o die Zustimmung der Hauptversammlung zur Streichung von Wandelanleihen.
• Der Mitgliederbeirat (fuer eine Gesellschaft mit mehreren Mitgliedern mit beschraenkter Haftung) oder der Eigentuemer des Unternehmens (fuer eine Gesellschaft mit einem einzigen Mitglied mit beschraenkter Haftung) genehmigt die Streichung von Anleihen.
• Fuer einen Wertpapierinvestmentfonds die Zustimmung des Kongresses der Anleger zur Streichung des Zertifikats des Fonds.
• Fuer eine staatliche Wertpapierinvestmentgesellschaft genehmigt die Hauptversammlung der Aktionäre die Streichung der Aktien.
Eine boersennotierte Gesellschaft kann ihre Wertpapiere nur dann de-listen, wenn die Aufhebung der Boersenzulassung durch einen Beschluss der Hauptversammlung gefasst wird, der von mehr als 50% der stimmberechtigten Aktionaere, die keine Hauptaktionaere sind, angenommen wurde.
Wenn sich ein Unternehmen freiwillig von der Boerse in Hanoi oder Ho-Chi-Minh-Stadt streicht, muss der Antrag auf Aufhebung der Boersennotierung auch einen Plan enthalten, der die Interessen der Aktionaere und Anleger beruecksichtigt. Die Hanoi- oder die Ho-Chi-Minh-Boerse muessen den Antrag auf Aufhebung der Boersenzulassung innerhalb von 10 bzw. 15 Tagen ab Erhalt eines gueltigen Antrags pruefen.
Auf den Verkauf von Anteilen an einer Gesellschaft abzufuehrende Steuern
Abhaengig davon, ob der Verkaeufer eine natuerliche oder juristische Person ist, gelten die folgenden Steuern:
• Kapitalertragssteuer. Die Kapitalertragsteuer ist eine Form der Einkommenssteuer, die auf eine Praemie auf den tatsaechlichen Kapitalbeitrag des urspruenglichen Anlegers oder dessen Anschaffungskosten zu zahlen ist. Auslaendische Unternehmen und oertliche Koerperschaften unterliegen einer Koerperschaftsteuer von 20%. Handelt es sich bei den uebertragenen Vermoegenswerten jedoch um Wertpapiere, so unterliegt ein auslaendischer Unternehmensverkaeufer einer Koerperschaftsteuer in Hoehe von 0,1% des Bruttoverkaufspreises.
• Persoenliche Einkommensteuer. Handelt es sich bei dem Verkaeufer um einen natuerliche ansaessige Person, wird eine Einkommensteuer in Hoehe von 20% der erzielten Gewinne und in Hoehe von 0,1% des Verkaufspreises erhoben, wenn es sich bei dem uebertragenen Vermoegenswert um Wertpapiere handelt. Ein einzelner Steuerinlaender ist definiert als eine Person, die:
o Sich in Vietnam fuer 183 Tage oder laenger innerhalb eines Kalenderjahres aufhaelt;
o Sich in Vietnam fuer einen Zeitraum von 12 aufeinanderfolgenden Monaten ab seiner Ankunft in Vietnam aufhaelt;
o Einen registrierten staendigen Wohnsitz in Vietnam hat; oder
o Ein Haus in Vietnam im Rahmen eines Mietvertrages mit einer Laufzeit von mindestens 90 Tagen in einem Steuerjahr mietet.
Wenn der Verkaeufer ein einzelner nicht Gebietsansaessiger ist, unterliegt er einer Einkommensteuer von 0,1% auf den Bruttoveraeusserungspreis, unabhaengig davon, ob ein Kapitalgewinn vorliegt.
Die Zahlung der oben genannten Transfersteuern ist in Vietnam zwingend.
Gesetzliche Genehmigungen
Der Anleger muss die Kapitaleinlage und den Kauf von Anteilen anmelden, wenn:
• Das Zielunternehmen in einem der 267 bedingten Sektoren taetig ist, auf die im Investitionsgesetz von 2015 Bezug genommen wird.
• Die Kapitaleinlage und der Kauf von Anteilen dazu fuehren, dass auslaendische Investoren 51% oder mehr des Satzungskapitals des Zielunternehmens besitzen (insbesondere von unter 51% bis ueber 51% und von 51% bis ueber 51%).
Die oertliche Abteilung fuer Planung und Investition, bei der das Zielunternehmen ansaessig ist, muss innerhalb von 15 Tagen nach Erhalt eines gueltigen Registrierungsantrags ihre endgueltige Genehmigung erteilen. In der Praxis kann dieses Verfahren aufgrund der Arbeitsbelastung einiger zentraler Behoerden und des Fehlens klarer Leitlinien jedoch mehrere Monate dauern. Daher kann die Registrierungspflicht zu erheblichen Verzoegerungen im gesamten M&A-Prozess fuehren.
In anderen Faellen muss die Zielgesellschaft nur den Wechsel der Mitgliedschaft/ Aktionaere bei der Geschaeftsregistrierungsabteilung registrieren.
Beschraenkungen der Rueckfuehrung von Gewinnen und / oder Devisenregeln fuer auslaendische Unternehmen
Wenn die Zielgesellschaft in Vietnam bereits ueber ein Investitionsregistrierungszertifikat verfuegt, muss sie bei einer zugelassenen Bank in Vietnam ein Konto fuer ein Direktanlagekapital eroeffnen. Die Zahlung fuer einen Anteilskauf durch einen auslaendischen Anleger muss ueber dieses Konto erfolgen. Das Konto kann auf Vietnamesische Dong oder eine Fremdwaehrung lauten. Wenn der auslaendische Investor ein Offshore-Investor ist, muss er darueber hinaus ein Kapitalkonto bei einer in Vietnam taetigen Geschaeftsbank eroeffnen, um die Zahlung auf das Konto des Verkaeufers zu ueberweisen und Gewinne zu erhalten.
Verfuegt die Zielgesellschaft in Vietnam nicht ueber ein Investitionsregistrierungszertifikat, muss der auslaendische Investor ein indirektes Kapitalkonto fuer die Zahlung an den Verkaeufer und die Ueberweisung von Gewinnen eroffnen.
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Bitte zoegern Sie nicht, Herrn Dr. Oliver Massmann unter omassmann@duanemorris.com zu kontaktieren, wenn Sie dazu Fragen haben oder mehr darueber erfahren wollen. Dr. Oliver Massmann ist der General Director von Duane Morris Vietnam LLC.

Lawyer in Vietnam Dr. Oliver Massmann PUBLIC MERGERS AND ACQUISITIONS

Vietnam has remained an attractive destination for foreign investors. In 2017, the total FDI capital to Vietnam is USD35.88 billion, an increase of 44.4% compared to last year. Out of USD35.88 billion FDI, USD6.19 billion came from 5,002 M&A deals, up 45.1% against last year.
Real estate continues being a very attractive sector, with USD1.5 billion being poured into the market via M&A, setting the record this year. Residential remains one of the most attractive segments and more interest is also put on commercial segment, especially Grade A offices. Main investors still come from Japan, Korea, Singapore, and China. The retail, consumer goods, and industrial goods are also very active, and investors tend to focus on leading companies as they have a big market share and strong brand value.
Main drivers of Vietnam’s M&A market are:
• Privatization of state-owned enterprises. It is forecast that there will be around 8-10 big privatization deals in 2018, including the sale of 24.86% shares of Petrolimex, 20% shares of Aviation Corporation of Vietnam, 53.48% state shares in Vietnam Textile Group, 57.92% state shares in Vietnam Steel Corporation and 49% of PV Oil. Hanel, Viglacera, Lilama are also in the list for privatization.
• Trade liberalization as a result of CPTPP, EU- Vietnam FTA, etc.
• Resolution No. 42 on pilot program of handling bad debts of credit institutions is also the main driving force of M&A in real estate sector as bad debts in real estate sectors accounts for a high percentage of the total bad debts in Vietnam’s market.
Notable deals in 2017 include the following:
• The market in 2017 sees several M&A deals in state-owned enterprises where the privatization is pushed hard by the Government. Vietnam Beverage – a company of a Thai billionaire managing ThaiBev buying more than 53% shares in Sabeco – a company owned by the Ministry of Industry and Trade at USD 5 billion, is the most notable and successful privatization deal this year.
• In December 2017, Shinhan Bank Vietnam Ltd. (“Shinhan Bank Vietnam”) acquired ANZ Bank (Vietnam) Limited’s retail business. This successful transaction has been considered as a big step for Shinhan Bank Vietnam’s development in Vietnam market, as well as a rapid growth for Vietnam retail banking in the upcoming time.
• In mid- November 2017, Jardine Cycle & Carriage Limited (JC&C), via Platinum Victory Pte. Ltd bought 5.53% shares of Vinamilk at USD616.6 million.
• In June 2017, Alibaba Group additionally bought shares of Lazada at USD1 billion, thus increasing its shares in Lazada to 83%
• In July 2017, Sea Limited (Singapore) bought 82% shares of Foody Corporation at USD64 million
• In November 2017, JD.com bought shares in Tiki JSC at USD 44 million
• In January 2018, Creador (a private Kula Lumpur-based investment fund) bought 35% shares of Mobile World Investment JSC at USD43 million.
• Synnex Technology International bought 30% shares of FPT Retail and 47% shares of FPT Trading from FPT Corporation at around USD 41 million.
• Shinhan cooperated with Vinacapital to invest USD100 million in Novaland.
How to obtain control of a public company
The most common means of obtaining control over a public company are as follows:
o The acquisition of shares/charter capital through:
o buying shares/charter capital from the existing shareholders of the company;
o buying shares/charter capital of a listed company on the stock exchange; and
o public share purchase offer.
o Through a merger. The 2014 Law on Enterprises sets out the procedures for company mergers by way of a transfer of all lawful assets, rights, obligations and interests to the merged company, and for the simultaneous termination of the merging companies.
o Through the acquisition of assets.
There are restrictions on the purchase of shares/charter capital of local companies by foreign investors in certain sensitive sectors. In addition, the law is silent on merger or assets acquisition (e.g., business spin-off) transactions where a foreign investor is a party. Regarding other assets acquisition transactions, if the asset is a real property, foreign ownership right will be restricted according to real estate laws.
Securities of public companies must be registered and deposited at the Vietnam Securities Depository Centre before being traded.
Depending on the numbers of shares purchased, an investor can become a controlling shareholder. Under the Vietnam Law on Securities, a shareholder that directly or indirectly owns 5% or more of the voting shares of an issuing organization is a major shareholder. Any transactions that result in more than 10% ownership of the paid-up charter capital of the securities company must seek approval of the State Securities Commission (SSC).
What a bidder generally questions before making a bid
Before officially contacting the potential target, the bidder conducts a preliminary assessment based on publicly available information. The bidder then contacts the target, expresses its intention of buying shares/subscribing for its shares and the parties sign a confidentiality agreement before the due diligence process. The confidentiality agreement basically includes confidentiality obligations in performing the transaction. The enforcement of confidentiality agreements by courts in Vietnam remains untested.
A bidder’s legal due diligence usually covers the following matters:
• Corporate details of the target and its subsidiaries, affiliates and other companies that form part of the target.
• Contingent liabilities (from past or pending litigation).
• Employment matters.
• Contractual agreements of the target.
• Statutory approvals and permits regarding the business activities of the target.
• Insurance, tax, intellectual property, debts, and land-related issues.
• Anti-trust, corruption and other regulatory issues.
Restrictions on shares transfer of key shareholders
Founding shareholders can only transfer their shares to other founding shareholders of the company within three years from the issuance of the Enterprise Registration Certificate. After then, the shares can be transferred freely. An internal approval of the general meeting of shareholders is always required if:
• The company increases its capital by issuing new shares.
• There is any share transfer of the founding shareholders within the above three-year period.
If the sale and purchase is a direct agreement between the company and the seller in relation to an issuance of shares, the selling price must be lower than the market price at the time of selling, or in the absence of a market price, the book value of the shares at the time of the approval plan to sell the shares. In addition, the selling price to foreign and domestic buyers must be the same.
When a tender offer is required
A tender offer is required in the following cases:
• Purchase of a company’s circulating shares that results in a purchaser, with no shareholding or less than a 25% shareholding, acquiring a 25% shareholding or more.
• Purchase of a company’s circulating shares that results in a purchaser (and affiliated persons of the purchaser), with a 25% or more shareholding, acquiring a further 10% or more of circulating shares of the company.
• Purchase of a company’s circulating shares that results in a purchaser (and affiliated persons of the purchaser), with a 25% shareholding or more, acquiring a further 5% up to 10% of currently circulating shares of the company within less than one year from the date of completion of a previous offer.
There is no guidance on building a stake by using derivatives. In addition, the bidder cannot purchase shares or share purchase rights outside the offer process during the tender offer period.
The bidder must publicly announce the tender offer in three consecutive editions of one electronic newspaper or one written newspaper and (for a listed company only) on the relevant stock exchange within seven days from the receipt of the State Securities Commission’s (SSC’s) opinion regarding the registration of the tender offer. The tender offer can only be implemented after the SSC has provided its opinion, and following the public announcement by the bidder.
Making the bid public
The offer timetable is as follows:
• The bidder prepares registration documents for its public bid to purchase shares.
• The bidder sends the bid registration documents to the SSC for approval and, at the same time, sends the registration documents to the target.
• The SSC reviews the tender documents within seven days.
• The board of the target must send its opinions regarding the offer to the SSC and the shareholders of the target within 14 days from receipt of the tender documents.
• The bid is announced in the mass media (although this is not a legal requirement).
• The length of the offer period is between 30 and 60 days.
• The bidder reports the results of the tender to the SSC within 10 days of completion.
Companies operating in specific sectors (such as banking, insurance, and so on) can be subject to a different timetable.
Offer conditions
A takeover offer usually contains the following conditions:
• The terms and conditions of the offer apply equally to all shareholders of the target.
• The relevant parties are allowed full access to the tender information.
• The shareholders have full rights to sell the shares.
• Applicable laws are fully respected.
An offer can also be subject to conditions precedent. Conditions precedent are set out in the share sale and purchase agreement or the capital contribution transfer agreement. There is no specific restriction on conditions precedent other than the requirement that they cannot be contrary to law and conflict with social ethics (although the legal definition of social ethics is unclear). The most common conditions precedent are:
• Amendments to the charter/relevant licence of the target.
• Obtaining necessary approvals to conduct the transaction.
• Changes to the target’s management body.
Payment of the contract price will only be made after the conditions precedent are met.
Employee consultation
There is no requirement under Vietnamese law that the employees must be consulted about the offer. However, if a layoff is to be conducted, the employer must:
• Prepare a labour usage plan.
• Consult with the employee representative.
• Notify the competent labour authority on the implementation of the labour usage plan.
When a tender offer is required?
A tender offer is required in the following cases:
• Purchase of a company’s circulating shares that results in a purchaser, with no shareholding, or less than a 25% shareholding, acquiring a 25% shareholding.
• Purchase of a company’s circulating shares that results in a purchaser (and affiliated persons of the purchaser), with a 25% or more shareholding, acquiring a further 10% or more of circulating shares of the company.
• Purchase of a company’s circulating shares that results in a purchaser (and affiliated persons of the purchaser), with a 25% shareholding or more, acquiring a further 5% up to 10% of currently circulating shares of the company within less than one year from the date of completion of the previous offer.
Form of consideration and minimum level of consideration
Under Vietnamese law, shares can be purchased by offering cash, gold, land use rights, intellectual property rights, technology, technical know-how or other assets. In practice, acquisitions are most commonly made for cash consideration.
In cases of full acquisition of state-owned enterprises, the first payment for the share purchase must not be less than 70% of the value of such shares, with the remaining amount being paid within 12 months.
In transactions involving auctions of shares by state-owned enterprises, the purchaser must make a deposit of 10% of the value of the shares registered for subscription based on the reserve price at least five working days before the auction date included in the target company’s rule. Additionally, the purchaser must transfer the entire consideration for the shares into the bank account of the body conducting the auction within ten working days of the announcement of the auction results.
In the case of a public tender offer, the payment and transfer of shares via a securities agent company appointed to act as an agent for the public tender offer must comply with Decree 58/2012/ND-CP.
Delisting a company
If a company seeks voluntarily de-listing, it must submit an application for de-listing that includes the following documents:
• A request for de-listing.
• For a joint stock company:
o the shareholders’ general meeting approval of de-listing of the stock;
o the board of directors’ approval of de-listing of bonds; and
o the shareholders’ general meeting approval of de-listing of convertible bonds.
• The members’ council (for a multi-member limited liability company) or the company’s owner (for a single member limited liability company) approval of de-listing of bonds.
• For a securities investment fund, the investors’ congress approval of de-listing of the fund’s certificate.
• For a public securities investment company, the shareholders’ general meeting approval of stock de-listing.
A listed company can only de-list its securities if de-listing is approved by a decision of the general meeting of shareholders passed by more than 50% of the voting shareholders who are not major shareholders.
If a company voluntarily de-lists from the Hanoi Stock Exchange or Ho Chi Minh Stock Exchange, the application for de-listing must also include a plan to deal with the interests of shareholders and investors. The Hanoi Stock Exchange or Ho Chi Minh Stock Exchange must consider the request for de-listing within ten and 15 days from the receipt of a valid application, respectively.
Transfer duties payable on the sale of shares in a company
Depending on whether the seller is an individual or a corporate entity, the following taxes will apply:
• Capital gains tax. Capital gains tax is a form of income tax that is payable on any premium on the original investor’s actual contribution to capital or its costs to purchase such capital. Foreign companies and local corporate entities are subject to a corporate income tax of 20%. However, if the assets transferred are securities, a foreign corporate seller is subject to corporate income tax of 0.1% on the gross transfer price.
• Personal income tax. If the seller is an individual resident, personal income tax will be imposed at the rate of 20% of the gains made, and 0.1% on the sales price if the transferred assets are securities. An individual tax resident is defined as a person who:
o stays in Vietnam for 183 days or longer within a calendar year;
o stays in Vietnam for a period of 12 consecutive months from his arrival in Vietnam;
o has a registered permanent residence in Vietnam; or
o rents a house in Vietnam under a lease contract of a term of at least 90 days in a tax year.
If the seller is an individual non-resident, he is subject to personal income tax at 0.1% on the gross transfer price, regardless of whether there is any capital gain.
Payment of the above transfer taxes is mandatory in Vietnam.
Regulatory approvals
The investor will need to register the capital contribution and purchase of shares if either:
• The target is operating in one of the 267 conditional sectors referred to in the 2015 Investment Law.
• The capital contribution and purchase of shares results in foreign investors owning 51% or more of the target’s charter capital (in particular, from below 51% to more than 51% and from 51% to above 51%).
The local Department of Planning and Investment where the target is located must issue its final approval within 15 days from the receipt of a valid registration application. However, in practice, this procedure can take several months due to the workload of certain central authorities and the lack of clear guidance documents. Therefore, the registration requirement can cause substantial delays to the whole M&A process.
In other cases, the target company only needs to register change of membership / shareholders at the Business Registration Division.
Restrictions on repatriation of profits and/ or foreign exchange rules for foreign companies
If the target company in Vietnam already has an investment registration certificate, it must open a direct investment capital account at a licensed bank in Vietnam. Payment for a share purchase by a foreign investor must be conducted through this account. The account can be denominated in Vietnamese dong or a foreign currency. In addition, if the foreign investor is an offshore investor, it will also need to open a capital account at a commercial bank operating in Vietnam to carry out the payment on the seller’s account and receive profits.
If the target company in Vietnam does not have an investment registration certificate, the foreign investor will need to open an indirect investment capital account for payment to the seller and remittance of profits.
***
Please do contact the author Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

Lawyer in Vietnam Dr. Oliver Massmann Public Mergers and Acquisitions: market analysis overview 2018

Largest / most noteworthy public M&A transactions in the past 12 months
Oil gas and chemicals
In May 2017, Earth Chemical bought 100% stake in A My Gia Joint Stock Company at about USD79.2 million.
Financial
In July 2017, Vietnam International Joint Stock Commercial Bank bought 100% business of Commonwealth Bank of Australia (Ho Chi Minh Branch).
In December 2017, Shinhan Bank Vietnam Ltd. (“Shinhan Bank Vietnam”) acquired ANZ Bank (Vietnam) Limited’s retail business. This successful transaction has been considered as a big step for Shinhan Bank Vietnam’s development in Vietnam market, as well as a rapid growth for Vietnam retail banking in the upcoming time.
Other
Retail. Noteworthy public M&A deals include the following:
• In January 2018, Creador (a private Kula Lumpur-based investment fund) bought 35% shares of Mobile World Investment JSC at USD43 million.
• ThaiBev buying more than 53% shares in Sabeco – a company owned by the Ministry of Industry and Trade at USD 5 billion.
• In November 2017, JD.com bought shares in Tiki JSC at USD 44 million.
• In June 2017, Alibaba Group additionally bought shares of Lazada at USD1 billion, thus increasing its shares in Lazada to 83%.
• In July 2017, Sea Limited (Singapore) bought 82% shares of Foody Corporatio at USD64 million.
• In April 2017, Shinhan Vietnam Bank bought the retail business of ANZ at an undisclosed value.
• In May 2017, Bien Hoa Sugar Company and Thanh Thanh Cong Tay Ninh Sugar Company bought 100% charter capital of HAGL Sugar at about USD58.52 million.
• Synnex Technology International bought 30% shares of FPT Retail and 47% shares of FPT Trading from FPT Corporation at around USD 41 million.
Food. Noteworthy deals include the following:
• In mid- November 2017, Jardine Cycle & Carriage Limited (JC&C), via Platinum Victory Pte. Ltd bought 5.53% shares of Vinamilk at USD616.6 million.
• In late March 2017, CJ Cheiljedang Corporation bought 20% stake in Saigon Trading Corporation at USD8.2 million, bringing its total ownership in Cau Tre Export Products Processing Joint Stock Company to 71.6%.
• In May 2017, Kido Corporation bought 27% stake in Vietnam Vegetable Oil Industry Corporation, bringing its total ownership in the company to 51%.
Real estate. Noteworthy deals include the following:
• Warburg Pincus in joint venture with VinaCapital bought 50% shares in Sofitel Legend Metropole Hanoi at about USD100 million.
• Warburg also established a joint venture with Becamex Industrial Development Corporation to invest in industrial real estate and logistics services with a capital of USD200 million.
• In May 2017, Elite Capital Resources Limited bought 100% shares of VinaLand Fund (VinaCapital) in Thang Long Limited Company (project owner of Times Square Hanoi) at USD41 million.
• In the first quarter of 2017, Sulyna Hospitality bought 70% stake in a 4-start resort in Phu Quoc from Berjaya Land at USD14.65 million.
• In the first quarter of 2017, An Gia Investment Corporation and its partner Creed Group bought 5 apartment blocks of La Casa Project of Van Phat Hung Corporation at about USD40 million.
• In March 2017, Keppel Corporation increased its shares in Saigon Centre project ato 16% at USD37 million.
• In January 2017, CapitaLand announced the purchase of 90% stake in CapitaLand Thanh Nien.
• Shinhan cooperated with Vinacapital to invest USD100 million in Novaland
Insurance. Noteworthy deals include the following:
• In April 2017, Aviva Insurance Corporation bought 50% stake of VietinBank Aviva Joint Venture Company from Vietnam Joint Stock Commercial Bank for Industry and Trade.
The major trends in the structuring of public M&A transactions
In Vietnam, M&A transactions usually take the form of either share or asset acquisitions, with share acquisition transactions outnumbering asset acquisition transactions.
Share acquisitions by foreign purchasers are commonly structured as offshore direct investments. The new investor can:
• Acquire shares or capital contributions from an existing shareholder in the target (for example, a joint stock company, limited liability company, and so on).
• Subscribe for newly issued shares of the target (for a joint stock company).
• Make further capital contributions to the target (for a limited liability company).
In the case of an asset deal, a foreign purchaser must generally establish a new subsidiary in Vietnam.
In addition, M&A transactions can also take the form of a merger. One or more companies of the same type can be merged into another company by transferring all assets, rights, obligations and interests to the merged company, terminating the existence of the merging company.
The 2014 Enterprise Law sets out the types of business structuring that can be used by investors as a result of M&A transactions. In addition, the 2014 Investment Law is the first law that regulates M&A transactions and clearly provides that such transactions do not require an investment registration certificate. Now, the foreign investors must seek approval from the local Department of Planning and Investment of the transaction if the:
• Target company operates in conditional business sectors applicable for foreign investors.
• Investment leading to foreign ownership of the target company is 51% or more (in particular, from below 51% to more than 51% and from 51% to above 51%).
In other cases, the target company only needs to register a change of membership/shareholding at the Business Registration Division. This change has ended years of uncertainty and frustration faced by foreign investors seeking entry into the Vietnam market or expansion through M&A transactions.
The level/extent of private equity-backed bids in the past 12 months
Investment in the form of M&A transactions is still the most popular form compared with private equity investment. In recent months, private equity funds have been following the securities market in Vietnam, especially companies carrying out value chain operations. Consumer goods and infrastructure are the sectors that attract the most attention. However, due to limited publicly available information, it is not possible to fully assess the level of private equity-backed bids.
The approach of the competition regulator(s) in the past 12 months
The Vietnam Competition Authority under the Ministry of Industry and Trade (VCA) must be notified of the transaction if participating companies have a combined market share in the relevant market of 30% up to 50%. The VCA will then examine whether the calculation of the combined market share is correct and whether the transaction is prohibited (that is, whether the combined market share exceeds 50%, except in certain cases). The transaction can be conducted when the VCA issues a written confirmation that the transaction is not prohibited under competition law.
In recent Grab buying Uber case in South East Asia, the VCA has started its investigation of possible violation of Vietnam’s Competition Law. The case is still at the examination stage.
For more information on the VCA, see www.vca.gov.vn/Default.aspx?lg=2.
Main factors affecting the public M&A market over the next 12 months
The country’s deeper and wider integration into the world’s economy is offering new opportunities for M&A activities.
Another factor includes the high pressure faced by the government to privatise state-owned enterprises to meet requirements under signed trade pacts, especially the EU – Vietnam Free Trade Agreement, which is expected to come into force in 2019.
Encouraging signs for foreign investment include:
• Reformed policies to allow wider access to foreign investors.
• ASEAN Economic Community single market and production base.
• The conclusion of free trade agreements (FTAs), including the EU – Vietnam FTA and The Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).
• Vietnam’s super rich population is growing faster than anywhere else and is on track to continue leading the growth in the next decade.
• Equitization of state-owned enterprises will speed up.
The introduction of the new Investment Law, Enterprise Law, Resolution No. 42 on handling bad debts and other laws and policies are creating an improved legal environment for investment and trade in general, and the M&A market in particular. However, the following factors also affect M&A transactions:
• Divergent interpretations and implementations by local licensing authorities of international treaties such as Vietnam’s WTO Commitments.
• Different licensing procedures applied to different types of transactions (for example, for foreign invested companies and domestic companies, public companies and private companies, and for buying state-owned shares or private shares).
Although legal and governance barriers, along with macro instability and the lack of market transparency are still the greatest concerns for investors, M&A deals in Vietnam are still expected to be one of the key, effective channels for market entry.
The major expected trends in the Vietnam M&A market include:
• Bank restructurings.
• Acquisitions and anti-acquisitions, particularly in the real estate sector.
• Growing Japanese and Thai investment in Vietnam through M&A transactions.
• Reform of SoEs.
***
Please do contact the author Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam.

Lawyer in Vietnam Dr. Oliver Massmann Public Mergers and Acquisitions: Market Analysis Overview

Largest / most noteworthy public M&A transactions in the past 12 months

Oil gas & Chemicals

In May 2017, Earth Chemical bought 100% stake in A My Gia Joint Stock Company at about USD79.2 million.

Financial

In July 2017, Vietnam International Joint Stock Commercial Bank bought 100% business of Commonwealth Bank of Australia (Ho Chi Minh Branch).

Other

Retail

  • Thai group Singha bought 25% and 33% stake in Masan Consumer Holdings and Masan Brewery respectively at a total of USD1.1 billion.
  • VinGroup bought Maximark at an undisclosed value.
  • In April 2017, Shinhan Vietnam Bank bought the retail business of ANZ at an undisclosed value.
  • In May 2017, Bien Hoa Sugar Company and Thanh Thanh Cong Tay Ninh Sugar Company bought 100% charter capital of HAGL Sugar at about USD58.52 million.

Food

  • In December 2016, Fraser & Neave (a Singaporean beverage company) bought 5.4% of Vinamilk’s shares at USD500 million.
  • In late 2016, Deasang Corp bought 99.99% stake in Duc Viet Food Joint Stock Company.
  • In November 2016, Kido Corporation bought 65% stake in Tuong An Vegetable Oil Company at about USD44.52.
  • In late March 2017, CJ Cheiljedang Corporation bought 20% stake in Saigon Trading Corporation at USD8.2 million, bringing its total ownership in Cau Tre Export Products Processing Joint Stock Company to 71.6%.
  • In May 2017, Kido Corporation bought 27% stake in Vietnam Vegetable Oil Industry Corporation, bringing its total ownership in the company to 51%.

Real estate

  • In June 2016, Mapletree Investments acquired Kumho Asiana Plaza project through the joint venture between Kumho Industrial and Asiana Airlines at USD215 million.
  • In July 2016, Mitsubishi bought the Manor Central Park project from Bitexco Group at an undisclosed deal value.
  • Also in July 2016, VinaCapital bought International Centre Building from Keppel Land Ltd. At USD13.8 million.
  • In September 2016, CapitalLand Vietnam bought Ho Chi Minh Cau Kho Land Plot project from River View Company Limited at USD51.9 million.
  • In the first quarter of 2017, Sulyna Hospitality bought 70% stake in a 4-start resort in Phu Quoc from Berjaya Land at USD14.65 million.
  • In the first quarter of 2017, An Gia Investment Corporation and its partner Creed Group bought 5 apartment blocks of La Casa Project of Van Phat Hung Corporation at about USD40 million.
  • In the same period, CapitaLand announced the purchase of 90% stake in CapitaLand Thanh Nien.

Insurance

  • In June 2016, FWD insurance company, a branch of Pacific Century, started the process of acquiring Great Eastern Vietnam after receiving the licence for this acquisition.
  • In June 2016, New Life RE bought Duxton Hotel from Low Keng Huat at USD49.2 million.
  • In April 2017, Aviva Insurance Corporation bought 50% stake of VietinBank Aviva Joint Venture Company from Vietnam Joint Stock Commercial Bank for Industry and Trade.

The major trends in the structuring of public M&A transactions

In Vietnam, M&A transactions usually take the form of either share or asset acquisitions, with share acquisition transactions outnumbering asset acquisition transactions.

Share acquisitions by foreign purchasers are commonly structured as offshore direct investments. The new investor can:

  • Acquire shares or capital contributions from an existing shareholder in the target (for example, a joint stock company, limited liability company, and so on).
  • Subscribe for newly issued shares of the target (for a joint stock company).
  • Make further capital contributions to the target (for a limited liability company).

In the case of an asset deal, a foreign purchaser must generally establish a new subsidiary in Vietnam.

In addition, M&A transactions can also take the form of a merger. One or more companies of the same type can be merged into another company by transferring all assets, rights, obligations and interests to the merged company, terminating the existence of the merging company.

The 2014 Enterprise Law sets out the types of business structuring that can be used by investors as a result of M&A transactions. In addition, the 2014 Investment Law is the first law that regulates M&A transactions and clearly provides that such transactions do not require an investment registration certificate. Now, the foreign investors must seek approval from the local Department of Planning and Investment of the transaction if the:

  • Target company operates in conditional business sectors applicable for foreign investors.
  • Investment leading to foreign ownership of the target company is 51% or more (in particular, from below 51% to more than 51% and from 51% to above 51%).

In other cases, the target company only needs to register a change of membership/shareholding at the Business Registration Division. This change has ended years of uncertainty and frustration faced by foreign investors seeking entry into the Vietnam market or expansion through M&A transactions.

The level/extent of private equity-backed bids in the past 12 months

Investment in the form of M&A transactions is still the most popular form compared with private equity investment. In recent months, private equity funds have been following the securities market in Vietnam, especially companies carrying out value chain operations. Consumer goods and infrastructure are the sectors that attract the most attention. However, due to limited publicly available information, it is not possible to fully assess the level of private equity-backed bids.

The approach of the competition regulator(s) in the past 12 months

The Vietnam Competition Authority under the Ministry of Industry and Trade (VCA) must be notified of the transaction if participating companies have a combined market share in the relevant market of 30% up to 50%. The VCA will then examine whether the calculation of the combined market share is correct and whether the transaction is prohibited (that is, whether the combined market share exceeds 50%, except in certain cases). The transaction can be conducted when the VCA issues a written confirmation that the transaction is not prohibited under competition law.

For more information on the VCA, see www.vca.gov.vn/Default.aspx?lg=2.

Main factors affecting the public M&A market over the next 12 months

The country’s deeper and wider integration into the world’s economy is offering new opportunities for M&A activities.

Another factor includes the high pressure faced by the government to privatise state-owned enterprises to meet requirements under signed trade pacts, especially the EU – Vietnam Free Trade Agreement, which is expected to come into force in 2019.

Encouraging signs for foreign investment include:

  • Reformed policies to allow wider access to foreign investors.
  • Formation of the ASEAN Economic Community at the end of 2015.
  • The conclusion of free trade agreements (FTAs).
  • Vietnam’s super rich population is growing faster than anywhere else and is on track to continue leading the growth in the next decade.
  • Equitization of state-owned enterprises will speed up.

The introduction of the new Investment Law, Enterprise Law and other laws and policies are creating an improved legal environment for investment and trade in general, and the M&A market in particular. However, the following factors also affect M&A transactions:

  • Divergent interpretations and implementations by local licensing authorities of international treaties such as Vietnam’s WTO Commitments.
  • Different licensing procedures applied to different types of transactions (for example, for foreign invested companies and domestic companies, public companies and private companies, and for buying state-owned shares or private shares).

Although legal and governance barriers, along with macro instability and the lack of market transparency are still the greatest concerns for investors, M&A deals in Vietnam are still expected to be one of the key, effective channels for market entry.

The major expected trends in the Vietnam M&A market include:

  • Bank restructurings.
  • Acquisitions and anti-acquisitions, particularly in the real estate sector.
  • Growing Japanese and Thai investment in Vietnam through M&A transactions.
  • Reform of SoEs.

***

Please do contact the author Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam.

 

Lawyer in Vietnam Dr. Oliver Massmann PUBLIC MERGERS AND ACQUISITIONS

FDI capital has been rising in the past few years. In the first 6 months of 2017, the total FDI capital to Vietnam is USD19.2 billion, an increase of 54.8% compared to the same period last year. Vietnam’s M&A market continues to be active in 2017 after reaching a record-breaking deal value of USD5.8 billion in 2016. The number of M&A deals amounts to 2,062 deals worth USD1.8 billion from January – May 2017, up 116.2% compared with the statistics last year.

Real estate continues to be the most attractive sector, with hundreds of millions of USD waiting to be poured into the market via M&A, especially in residential, offices, retail, hotel and industrial park segments. Main investors still come from Japan, Korea, Singapore, and particularly a rising number of investors from China recently. The retail, consumer goods, and industrial goods are also very active, with M&A deals accounting for 53% of total deals in 2016. This is partly due to an attractive market of about 93 million people with high purchasing power.

Notable deals in 2016 and first half of 2017 include the following:

  • Central Group (Thai Group) bought BigC Vietnam at USD1.1 billion
  • TTC Holdings (Thailand) bought Metro Vietnam at USD710 million
  • In March 2017, Siam City Centre bought 65% of Holcim Vietnam from LafargeHolcim at USD524 million
  • In April 2016, Mirae Asset (a Korean securities company) together with AON BGN Investment Company (an UK company) bought Keangnam Hanoi Landmark Tower at USD350 million
  • In December 2016, Fraser & Neave ( a Singaporean beverage company) bought 5.4% of Vinamilk’s shares at USD500 million

Note: Owner of Fraser & Neave is also owner of TTC Holdings

  • In January 2016, Mobifone bought 95% of AVG’s shares at USD400 million

Leading companies in the sectors are main target of foreign investors. They have the advantage of holding strong brands, strong market share or controlling significant natural resources.

We hope that the M&A will continue its trend when the Government speeds up the equitization of many state-owned enterprises, especially in power, infrastructure and telecommunication sectors. Experts forecast the total value of M&A deals in 2017 will reach up to USD6.2 -6.5 billion.

How to obtain control of a public company

The most common means of obtaining control over a public company are as follows:

  • The acquisition of shares/charter capital through:
  • buying shares/charter capital from the existing shareholders of the company;
  • buying shares/charter capital of a listed company on the stock exchange; and
  • public share purchase offer.
  • Through a merger. The 2014 Law on Enterprises sets out the procedures for company mergers by way of a transfer of all lawful assets, rights, obligations and interests to the merged company, and for the simultaneous termination of the merging companies.
  • Through the acquisition of assets.

There are restrictions on the purchase of shares/charter capital of local companies by foreign investors in certain sensitive sectors. In addition, the law is silent on merger or assets acquisition (e.g., business spin-off) transactions where a foreign investor is a party. Regarding other assets acquisition transactions, if the asset is a real property, foreign ownership right will be restricted according to real estate laws.

Securities of public companies must be registered and deposited at the Vietnam Securities Depository Centre before being traded.

Depending on the numbers of shares purchased, an investor can become a controlling shareholder. Under the Vietnam Law on Securities, a shareholder that directly or indirectly owns 5% or more of the voting shares of an issuing organization is a major shareholder. Any transactions that result in more than 10% ownership of the paid-up charter capital of the securities company must seek approval of the State Securities Commission (SSC).

What a bidder generally questions before making a bid

Before officially contacting the potential target, the bidder conducts a preliminary assessment based on publicly available information. The bidder then contacts the target, expresses its intention of buying shares/subscribing for its shares and the parties sign a confidentiality agreement before the due diligence process. The confidentiality agreement basically includes confidentiality obligations in performing the transaction. The enforcement of confidentiality agreements by courts in Vietnam remains untested.

A bidder’s legal due diligence usually covers the following matters:

  • Corporate details of the target and its subsidiaries, affiliates and other companies that form part of the target.
  • Contingent liabilities (from past or pending litigation).
  • Employment matters.
  • Contractual agreements of the target.
  • Statutory approvals and permits regarding the business activities of the target.
  • Insurance, tax, intellectual property, debts, and land-related issues.
  • Anti-trust, corruption and other regulatory issues.

Restrictions on shares transfer of key shareholders

Founding shareholders can only transfer their shares to other founding shareholders of the company within three years from the issuance of the Enterprise Registration Certificate. After then, the shares can be transferred freely. An internal approval of the general meeting of shareholders is always required if:

  • The company increases its capital by issuing new shares.
  • There is any share transfer of the founding shareholders within the above three-year period.

If the sale and purchase is a direct agreement between the company and the seller in relation to an issuance of shares, the selling price must be lower than the market price at the time of selling, or in the absence of a market price, the book value of the shares at the time of the approval plan to sell the shares. In addition, the selling price to foreign and domestic buyers must be the same.

When a tender offer is required

A tender offer is required in the following cases:

  • Purchase of a company’s circulating shares that results in a purchaser, with no shareholding or less than a 25% shareholding, acquiring a 25% shareholding or more.
  • Purchase of a company’s circulating shares that results in a purchaser (and affiliated persons of the purchaser), with a 25% or more shareholding, acquiring a further 10% or more of circulating shares of the company.
  • Purchase of a company’s circulating shares that results in a purchaser (and affiliated persons of the purchaser), with a 25% shareholding or more, acquiring a further 5% up to 10% of currently circulating shares of the company within less than one year from the date of completion of a previous offer.

There is no guidance on building a stake by using derivatives. In addition, the bidder cannot purchase shares or share purchase rights outside the offer process during the tender offer period.

The bidder must publicly announce the tender offer in three consecutive editions of one electronic newspaper or one written newspaper and (for a listed company only) on the relevant stock exchange within seven days from the receipt of the State Securities Commission’s (SSC’s) opinion regarding the registration of the tender offer. The tender offer can only be implemented after the SSC has provided its opinion, and following the public announcement by the bidder.

Making the bid public

The offer timetable is as follows:

  • The bidder prepares registration documents for its public bid to purchase shares.
  • The bidder sends the bid registration documents to the SSC for approval and, at the same time, sends the registration documents to the target.
  • The SSC reviews the tender documents within seven days.
  • The board of the target must send its opinions regarding the offer to the SSC and the shareholders of the target within 14 days from receipt of the tender documents.
  • The bid is announced in the mass media (although this is not a legal requirement).
  • The length of the offer period is between 30 and 60 days.
  • The bidder reports the results of the tender to the SSC within 10 days of completion.

Companies operating in specific sectors (such as banking, insurance, and so on) can be subject to a different timetable.

Offer conditions

A takeover offer usually contains the following conditions:

  • The terms and conditions of the offer apply equally to all shareholders of the target.
  • The relevant parties are allowed full access to the tender information.
  • The shareholders have full rights to sell the shares.
  • Applicable laws are fully respected.

An offer can also be subject to conditions precedent. Conditions precedent are set out in the share sale and purchase agreement or the capital contribution transfer agreement. There is no specific restriction on conditions precedent other than the requirement that they cannot be contrary to law and conflict with social ethics (although the legal definition of social ethics is unclear). The most common conditions precedent are:

  • Amendments to the charter/relevant licence of the target.
  • Obtaining necessary approvals to conduct the transaction.
  • Changes to the target’s management body.

Payment of the contract price will only be made after the conditions precedent are met.

Employee consultation

There is no requirement under Vietnamese law that the employees must be consulted about the offer. However, if a layoff is to be conducted, the employer must:

  • Prepare a labour usage plan.
  • Consult with the employee representative.
  • Notify the competent labour authority on the implementation of the labour usage plan.

When a tender offer is required?

A tender offer is required in the following cases:

  • Purchase of a company’s circulating shares that results in a purchaser, with no shareholding, or less than a 25% shareholding, acquiring a 25% shareholding.
  • Purchase of a company’s circulating shares that results in a purchaser (and affiliated persons of the purchaser), with a 25% or more shareholding, acquiring a further 10% or more of circulating shares of the company.
  • Purchase of a company’s circulating shares that results in a purchaser (and affiliated persons of the purchaser), with a 25% shareholding or more, acquiring a further 5% up to 10% of currently circulating shares of the company within less than one year from the date of completion of the previous offer.

Form of consideration and minimum level of consideration

Under Vietnamese law, shares can be purchased by offering cash, gold, land use rights, intellectual property rights, technology, technical know-how or other assets. In practice, acquisitions are most commonly made for cash consideration.

In cases of full acquisition of state-owned enterprises, the first payment for the share purchase must not be less than 70% of the value of such shares, with the remaining amount being paid within 12 months.

In transactions involving auctions of shares by state-owned enterprises, the purchaser must make a deposit of 10% of the value of the shares registered for subscription based on the reserve price at least five working days before the auction date included in the target company’s rule. Additionally, the purchaser must transfer the entire consideration for the shares into the bank account of the body conducting the auction within ten working days of the announcement of the auction results.

In the case of a public tender offer, the payment and transfer of shares via a securities agent company appointed to act as an agent for the public tender offer must comply with Decree 58/2012/ND-CP.

Delisting a company

If a company seeks voluntarily de-listing, it must submit an application for de-listing that includes the following documents:

  • A request for de-listing.
  • For a joint stock company:
    • the shareholders’ general meeting approval of de-listing of the stock;
    • the board of directors’ approval of de-listing of bonds; and
    • the shareholders’ general meeting approval of de-listing of convertible bonds.
  • The members’ council (for a multi-member limited liability company) or the company’s owner (for a single member limited liability company) approval of de-listing of bonds.
  • For a securities investment fund, the investors’ congress approval of de-listing of the fund’s certificate.
  • For a public securities investment company, the shareholders’ general meeting approval of stock de-listing.

A listed company can only de-list its securities if de-listing is approved by a decision of the general meeting of shareholders passed by more than 50% of the voting shareholders who are not major shareholders.

If a company voluntarily de-lists from the Hanoi Stock Exchange or Ho Chi Minh Stock Exchange, the application for de-listing must also include a plan to deal with the interests of shareholders and investors. The Hanoi Stock Exchange or Ho Chi Minh Stock Exchange must consider the request for de-listing within ten and 15 days from the receipt of a valid application, respectively.

Transfer duties payable on the sale of shares in a company

Depending on whether the seller is an individual or a corporate entity, the following taxes will apply:

  • Capital gains tax. Capital gains tax is a form of income tax that is payable on any premium on the original investor’s actual contribution to capital or its costs to purchase such capital. Foreign companies and local corporate entities are subject to a corporate income tax of 20%. However, if the assets transferred are securities, a foreign corporate seller is subject to corporate income tax of 0.1% on the gross transfer price.
  • Personal income tax. If the seller is an individual resident, personal income tax will be imposed at the rate of 20% of the gains made, and 0.1% on the sales price if the transferred assets are securities. An individual tax resident is defined as a person who:
    • stays in Vietnam for 183 days or longer within a calendar year;
    • stays in Vietnam for a period of 12 consecutive months from his arrival in Vietnam;
    • has a registered permanent residence in Vietnam; or
    • rents a house in Vietnam under a lease contract of a term of at least 90 days in a tax year.

If the seller is an individual non-resident, he is subject to personal income tax at 0.1% on the gross transfer price, regardless of whether there is any capital gain.

Payment of the above transfer taxes is mandatory in Vietnam.

Regulatory approvals

The investor will need to register the capital contribution and purchase of shares if either:

  • The target is operating in one of the 267 conditional sectors referred to in the 2015 Investment Law.
  • The capital contribution and purchase of shares results in foreign investors owning 51% or more of the target’s charter capital (in particular, from below 51% to more than 51% and from 51% to above 51%).

The local Department of Planning and Investment where the target is located must issue its final approval within 15 days from the receipt of a valid registration application. However, in practice, this procedure can take several months due to the workload of certain central authorities and the lack of clear guidance documents. Therefore, the registration requirement can cause substantial delays to the whole M&A process.

In other cases, the target company only needs to register change of membership / shareholders at the Business Registration Division.

Restrictions on repatriation of profits and/ or foreign exchange rules for foreign companies

If the target company in Vietnam already has an investment registration certificate, it must open a direct investment capital account at a licensed bank in Vietnam. Payment for a share purchase by a foreign investor must be conducted through this account. The account can be denominated in Vietnamese dong or a foreign currency. In addition, if the foreign investor is an offshore investor, it will also need to open a capital account at a commercial bank operating in Vietnam to carry out the payment on the seller’s account and receive profits.

If the target company in Vietnam does not have an investment registration certificate, the foreign investor will need to open an indirect investment capital account for payment to the seller and remittance of profits.

***

Please do contact the author Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

 

 

 

ベトナムにおける弁護士 オリバー マスマン:一般企業のM&A

ベトナムが2007年に世界貿易機関(WTO)の正式メンバーとなってから、ベトナムにおけるM&A活動は着実に成長しています。最初のベトナムにおけるM&Aの波は2008年~2013年の期間に起こり、総価格は150億米ドルと報告されています。日本の投資家は2012年におよそ12億米ドル相当の取引をしています。日本は量及び価値の両方の面に関して、ベトナムのM&A取引のための主要国です。これにより2012年にベトナムのM&A市場が51億米ドルの最高額に達しました。不動産はM&A取引の総価格が20件の取引で16億3700万米ドルまで達し、ベトナムの外国人投資家によるM&A価値は全体の69%を占め、最も魅力的な分野だと考えられています。小売、消費財、産業財及びサービス部門もまたM&A取引において高価値で非常に活発な分野となっています。

ストックプラス社が行った調査によると、ベトナムのM&A市場は2014年に大きく回復し毎週6件の取引が報告されています。2015年にはM&A取引が合計341件あり、価格が52億米ドルとなり、取引件数は23.1%増加し、前年と比べて取引価格が9.7%上昇しました。

株式会社のコントロールをする為には?

株式会社に対するコントロールを得るために最も一般的な方法は以下の通りです。

o 株式/定款資本の買収を通して

o 同社の既存株主から株式/定款資本を購入

o 証券取引所で上場企業の株式/定款資本を購入

o 公開株式購入オファー

o 合併を通して。2014年企業法では、合弁会社へ全ての合法的な資産、権利、義務そして利益を譲渡する方法で企業合弁する手順及び、合弁している企業の同時終了のための手順が述べられています。

o 資産の買収を通して

外国人投資家は地場企業の株式/定款資本の購入に対して制限があります。さらに、外国人投資家が当事者にあたる場合、合併または資産買収取引は法律で禁止されています。

公開企業の証券は取引前にベトナム証券保管振替機構にて登録及び保管しなければなりません。

株式数の購入に応じて、投資家は支配株主になることができます。ベトナム証券法に基づき、直接的、または間接的に発行機関の議決権株式を5%以上保有する株主は大株主になります。証券会社の払込み済み定款資本を10%以上保有する取引は国家証券委員会(SSC)の承認を求めなければなりません。

入札者が一般的に入札を行う前に疑問に思うこと

正式に可能性のある対象企業に連絡をする前に、入札者はに公に入手可能な情報をもとに事前評価を行います。入札者は次に対象企業へ連絡を取り、株式を購入/株式に応募する意向を表し、当事者はデューデリジェンスの前に機密保持契約を締結します。機密保持契約は原則的に取引を行う際の守秘義務を含みます。ベトナムの裁判所による機密保持契約の施行はまだ試されていないままです。

入札者の法的なデューデリジェンスは次の事項が含まれます。

  • 対象企業やその子会社、関連会社及び対象企業の一部である他企業の企業詳細
  • 偶発債務(過去または紛争中の訴訟)
  • 雇用問題
  • 対象企業の契約上の同意
  • 対象企業の事業活動に関しての法定の承認及び許可
  • 保険、税金、知的財産、債務及び土地関連の問題
  • 独占禁止、腐敗及びその他の規制問題

主要株主の株式譲渡に対する制限

創立株主は唯一企業登録証明書の発行から3年以内に会社の別の創立株主へ株式を譲渡することが出来ます。その後、株式を自由に譲渡することができます。株主総会での内部承認が常に必要な際は以下の場合です。

  • 企業が新株式を発行することにより資本を増加する場合。
  • 上記3年以内に創立株主の株式譲渡する場合。

販売及び購入が株式発行に関して企業と売り手の間で直接契約している場合、販売価格は販売時の市場価格よりも低く、あるいは市場価格が存在しない場合は株式を売るための計画承認時の株式の簿価よりも低くなくてはなりません。さらに、国内外のバイヤーに販売価格が同じでなければなりません。

公開買い付けが必要になる時?

公開買い付けは以下の場合必要となります。

  • 株式保有が無いあるいは25%以下の株式保有で、購入者が25%以上の株式を買収する企業の循環株の購入。
  • 25%以上の株式を保有し、(購入者の関連者など)購入者がさらに企業の循環株の10%以上を買収する企業の循環株の購入。
  • 25%以上の株式を保有し、(購入者の関連者など)購入者がさらに以前のオファーの完了日から1年未満に企業の現在の循環株の5~10%を買収する企業の循環株の購入。

金融派生商品を使用することによる利益構築に関するガイダンスはありません。さらに、入札者は公開買い付け期間中に株式を購入することや、購入権を外部提供者へ共有することはできません。

入札者は公開買い付けを電子新聞、新聞及び(上場企業の場合のみ)証券取引所の3連続版に、公開買い付けの登録に関する国家証券委員会(SSC)の意見を受理してから7日以内に公表しなければなりません。SSCが意見を提供し、入札者によって以下が公表された後に公開買い付けは実行されます。

入札を公開すること

申し込みタイムテーブルは以下の通りです。

  • 入札者は株式を購入するため公開入札の書類を準備します。
  • 入札者はSSCへ承認を得るために入札登録証を送り、同時に対象企業へ登録証を送ります。
  • SSCは7日以内に入札書類を確認します。
  • 対象企業の取締役会は入札書類の受領後から14日以内にSSC及び対象企業の株主へオファーに関する意見を渡さなければなりません。
  • 入札はマスコミへ公表されます。(法的要件ではありません)
  • 募集期間は30日~60日間です。
  • 入札者は完了してから10日以内にSSCへ入札の結果を報告します。

銀行や保険などの特定の分野における事業を行う企業は、異なるタイムテーブルを受けることができます。

対価の形と最低水準

ベトナムの法律に基づき、株式は現金、金、土地使用権、知的財産権、技術、技術的なノウハウやその他の資産を提供することにより購入することができます。実際に、買収は一般的に現金で行われています。

国営企業の完全買収の場合、株式購入の為の最初の支払いは該当株式の価格の70%以上で12ヶ月以内に残金を支払わなくてはなりません。

国営企業による株式の競売を含む譲渡において、購入者は対象企業の規定に含まれる入札日の最低5営業日前までに最低競売価格に基づいて購入予約の為、株式登録の価格の10%支払わなければなりません。

さらに、購入者は競売結果の発表10営業日以内に競売を行う機関の銀行口座へ株式の全報酬を譲渡しなれければなりません。

公開株式の場合、公開株式買い付け為に任命された証券代行会社による株式の支払い及び譲渡は政令58/2012/ND-CPに従って行われます。

企業の上場廃止

企業が自主的に上場を廃止する場合は、以下の書類を含む上場廃止に関する申請書を提出しなければなりません。

  • 上場廃止のための依頼書
  • 合弁会社の場合

o 株主総会で株式の上場廃止の承認

o 債券の上場廃止に関する取締役会の承認

o 転換社債の上場廃止に関する株主総会の承認

  • 債券の上場廃止に関する(複数人から構成される有限会社の)社員総会または(1人有限会社の)企業のオーナーの承認。
  • 証券投資ファンドに関しては、ファンドが持つ証券の上場廃止の投資家による議会承認。
  • 公共証券投資企業に関しては、株式上場廃止の株主総会の承認。

上場廃止が主要株主以外の議決権の50%以上で可決された株主総会の決定によって承認される場合、上場企業は唯一証券の上場廃止をすることができます。

企業が自主的にハノイ証券取引所またはホーチミン証券取引所へ上場廃止を申請する場合、上場廃止に関する申請書類は株主または投資家の利益への対応策を含めないといけません。それぞれハノイ証券取引所またはホーチミン証券取引所は有効な申請書類の受領から10~15日以内に上場廃止の為の要請を検討しなければなりません。

企業の株式売却に関する譲渡の支払い

売り手が個人か企業かによって次の税金が適用されます。

  • キャピタルゲイン税。キャピタルゲイン税は資本に対する投資家の実際の利益、あるいはその資本を購入するための費用を支払う外資企業及び地場企業は20%の法人税が対象になります。しかしながら、資産譲渡が証券の場合は外資企業の売り手は総譲渡価格の0.1%の法人税が対象になります。
  • 個人所得税。売り手が個人の居住者の場合、個人所得税は利益の20%が対象となり、もし資産譲渡が証券の場合販売価格の0.1%が対象です。所得税を支払う居住者は以下に定義された人です。

o 暦年内で183日以上ベトナムに滞在する人

o ベトナムで12ヶ月連続して滞在する人

o ベトナムで永住権を保有している人

o 課税年度中に賃貸契約に基づきベトナムで最低90日家を賃貸している人

売り手が個人で非居住者の場合、キャピタルゲイン税の有無に関係なく総譲渡価格の0.1%が個人所得税の対象となります。

上記の譲渡税の支払いはベトナムでは必須です。

規制当局の承認

投資家は下記のいずれかの場合、株式の出資及び購入の際に登録する必要があります。

  • 対象企業が2015年投資法で言及された267の条件付き分野の一つである場合。
  • 対象企業の定款資本の51%以上を保有する外国人投資家による株式の出資及び購入。(特に51%以下から51%以上、51%から51%以上になる場合)

対象企業が所在する現地の計画投資省では有効な登録申請の受理から15日以内に最終承認の発行をしなければなりません。しかしながら、実際にはこの手続きは特定中央当局の作業負荷及び不透明なガイダンスにより数ヶ月かかっています。従って、登録要件は全体のM&A手続きにかなりの遅れが生じる可能性があります。

他の例では、対象企業は企業登録部門で会員または株主の登録変更をする必要があります。

利益の本国送還または外資企業のための外国為替規制に関する制限

ベトナムにおける対象企業が既に投資証明書を保有している場合、ベトナムの許可銀行で直接投資資本勘定を開かなければなりません。外国人投資家による株式購入のための支払いはこの口座を通して行われます。この口座はベトナムドンまたは外貨建てで行えます。さらに、外国人投資家がオフショア投資家の場合は、ベトナムの商業銀行にて売り手の口座へ支払い及び利益を受け取るための資本口座を開設する必要があります。

ベトナムにおける対象企業が投資証明書を保有していない場合、外国人投資家は売り手への支払い及び利益の送金の為に間接投資資本勘定を開く必要があります。

〈ご注意〉こちらの記事は皆様に情報をお届けする目的でのみ作成・掲載しておりますので、法的なアドバイスとして提供・構成することを目的としておりません。詳細につきましては、当法律事務所の注意書きをご一読下さい。

オリバー・マスマンはドウェイン・モリス・ベトナム法律事務所のディレクターです。上記に関するご質問等はomassmann@duanemorris.comまでお気軽にご連絡ください。

ベトナムにおける弁護士 オリバー マスマン:M&A市場分析の要約

過去12ヶ月で最大且つ最も注目すべきM&A 取引

金融での注目すべきM&A取引は以下の通りです。

  • 2015年5月、サイゴン商信株式商業銀行Sai Gon Thuong Tin Commercial Joint Stock Bank(Sacombank)はSouthern Commercial 株式銀行と合併しました。この合併により、Southern 銀行の株主はそれぞれ保有する株式に対しSacombank銀行の株式を0.75取得。Sacombank銀行という合弁企業自体は定款資本を18.85 兆ベトナムドン(8億5600万米ドル)以上保有し、総資産は290.86 兆ベトナムドン(132億米ドル)以上となっています。Sacombank銀行の株主は93.7%の議決にて合弁に同意しました。
  • 2015年5月、the Mekong Housing Bank とベトナム投資開発銀行との合併が完了しました。
  • 2015年5月、ベトナム工商銀行(Vietinbank)はペトロリメックス株式商業銀行(PG Bank)と合併しました。PG Bank の株とVietinbankの株の交換比率は1株:0.9株となり、Vietinbank は同社の株2億7000万株をPG Bank の株式3億株と交換できます。合併によりVietinbank の総資産は25兆ベトナムドン(11億9000万ドル) から685兆ベトナムドン(317億ドル)に増加し、定款資本は3兆ベトナムドン(1億4286万米ドル)から40兆ベトナムドン(18億5000米ドル)以上に増加しました。
  • 2015年5月、クレディセゾンはベトナムで3番目に大きな消費者金融事業であるHDファイナンスの資本の49%を保有する為におよそ5億円費やしています。
  • 2015年8月、メコン開発銀行(MDB)は定款資本の面で国の5大銀行の1つになる機関を形成する為にベトナム海事商業銀行(Maritime Bank)と合併をしました。近年、海事銀行の定款資本は3億7380万米ドルでメコン開発銀行は1億7523万米ドルとなり、つまり新しい金融機関は定款資本が5億4900万米ドル、総資産は52億8000万米ドルとなる見込みです。

その他

小売での注目すべき取引は以下となります。

  • 2016年4月29日、タイのセントラルグループはフランス系カジノグループからビッグCを14億4000万米ドルで買収しました。
  • 2015年6月、ウォーバーグ・ビンカス( WarbusPincus)はビンコム リテール(Vincom Retail)に1億米ドル投資し、少数株主を維持しました。

 

食品での注目すべき取引は以下となります。

  • 2015年5月、マサングループ(Masan Group)はVietnam French Cattle Feed JSC (Proconco) の総株式の52%を取得しています。買収はグループがSam Kim Limited Liability Companyの総株式の99.99%を買収し、Masan Nutri-Science Companyに改称した際に行いました。
  • 2015年5月、Filipino firm Pilmico Foods Corporationは拡張入札の為にベトナムのいくつかの飼料会社を買収。the Aboitiz Group の子会社であるPilmicoは2014年に2800万米ドルの価格でVinh Hoan 1 Feed JSC (VHF)の総株式の70%を買収しました。
  • 2015年7月、Mondelēz Internationalはおよそ3億7000万米ドルでベトナムの人気スナック事業である Kinh Do Corporationの総株式の80%の買収を完了しました。
  • 2016年6月30日、Masan Nutri-Science株式会社はAgricultural Nutrition株式会社の株式を追加で30%買収し、会社の完全所有者になりました。

 

不動産での注目すべき取引は以下となります。

  • 2015年5月、ドゥックロンザライ(Duc Long Gia Lai)は取引価格1170万米ドルでマスノーブル(Mass Noble)の株式97.73%を買収しました。
  • 2015年6月、総取引金額は公表されていませんが、ビングループはVefac の89.42%を買収しました。
  • 2015年6月、香港に拠点を置く非公開投資会社のGaw Capital Partners (GCP)は、ベトナムの不動産プロジェクトのポートフォリオを取得しました。ポートフォリオは1億600万米ドルで買収され、Indochina Land Holdings 2 Ltd の下で残りの4つのプロジェクトから成り立っています。
  • 2015年6月、ムンタンホスピタリティー(Muong Thanh hospitality)及びプードンホテル(Phuong Dong hotel)との間の買収が完了しました。 ムンタンホスピタリティーはプードンホテルを100%買収し、Phuong Dong Petroleum Tourism JSC社の一部になりました。
  • 2015年7月初旬、マレーシアの不動産開発のGamuda Berhad の1部門であるGamuda Land VietnamはサコムリアルからCeladon City 及びThanh Cong JSC (TTC)を推定1.4 兆ベトナムドン(6410万米ドル)で買収しました。推定初期投資は 24.8兆ベトナムドン (11億米ドル)となっています。
  • 2015年、ビングループは不動産、小売、物流部門において支配的なローカルM&A買収者となりました。最も注目すべき追加案件は以下となります。

o マステリ・タオディエン(Masteri Thao Dien)は7500万米ドル

o ビナテックス(Vinatex)の株式保有30% が2600万米ドル

o Giang Vo Tradeの株式保有90%が6900万米ドル

o Hop Nhat Express の株式保有30% は5200万米ドル

  • 2015年12月、ビングループは取引価格2億5200万米ドルでホアフオンズオン社(Hoa Huong Duong)を完全買収しました。この取引によりビングループはホアフオンズオン社の子会社であるVinaconex-Viettel の98.3%株式を取得しました。
  • 2016年3月、ロッテグループはポスコからホーチミン市にあるダイヤモンドプラザの総株式の70%を買収しました。取引価格は公表されていません。
  • 2016年4月、Muong Thanh Corporation は取引価格3兆5000億ベトナムドンでCienco 5の総株式の95%を買収しました。

 

保険

  • 2016年4月、エースライフ(ACE Life)とChubb の間の合併は完了し、エースライフは社名をChubb Life in Vietnam に変更しました。
  • 2ヶ月後、パシフィックセンチュリーの支社であるFWD保険会社は この買収に関するライセンスを受領後にGreat Eastern Vietnam の買収を開始しました。

 

M&A取引の体制での主要な動向

ベトナムでは、資産買収取引よりも株式買収取引のほうが多く、M&A取引は株式取得または資産買収のどちらかの形で行われます。

外国人購入者による株式取得は一般的にオフショアの直接投資として構成されています。新投資家は以下が可能です。

  • 対象企業の現在の株主から株式取得または出資が可能(例、株式会社、有限会社など)。
  • 対象企業の新規株式の発行を許可(株式会社に対して)。
  • 対象企業の追加出資が可能(有限会社に対して)。

資産取引の場合は、外国人購入者は原則的にベトナムに新たな子会社を設立しなければなりません。

さらに、M&A取引は合併の形を取ることが可能となります。2つ以上の同業企業は別の企業と合併することができ、全ての資産、権利、義務、利益を合併した企業へ転送でき、合併している企業を終了することが出来ます。

2014年企業法はM&A取引の結果として投資家により使用される事業構造のタイプを設定することが可能となります。さらに、2014年投資法はM&A取引を規制し、その取引に投資証明書が不要であると明確に示した最初の法律です。対象企業が外国人投資家に対して適用している条件付き事業分野を運営する場合、または対象企業の51%以上が外国資本になる投資の場合(特に、51%以下から51 %以上、51%から51%以上)、外国人投資亜家は現地の計画投資省にて取引の承認を得なければなりません。他の例では、対象企業は事業登録課にてメンバーまたは株主の登録者を変更する必要があります。この変化は幸いにもM&A取引を通してベトナム市場に参入または拡大しようとしている外国人投資家が経験している不明確で苦労を終わらせることができると予想されています。

過去12ヶ月での未公開株式の担保入札のレベル及び範囲

M&A取引の形での投資はいまだに非公開株式投資 と比較して最も一般的な投資の形です。ここ数ヶ月で、非公開株式資本はベトナムでの証券市場に続いており、特にバリューチェーン活動を行っている企業にあります。消費財やインフラが最も注目を集めている分野となっていますがただ、情報公開が制限されている為、完全に非公開株式の担保入札を評価するこはできません。

過去12ヶ月の 競合規制者のアプローチ

産業貿易商(VCA)のもとでベトナム競争庁は参加企業が30%から50%関連市場の合計市場シェアを持つ場合、その取引の通知をしなければなりません。VCAは合計市場シェアの計算が正しいか、また取引が禁止されているかどうか(つまり、ある特定の場合を除いて合計市場シェアが50%を超えているかどうか)を調査します。取引は競争法の基でその取引が禁止されていないとVCAが確認書を発行した際に行われます。

更なるVCAの情報はwww.vca.gov.vn/Default.aspx?lg=2をご確認下さい。

今後12ヶ月の間にM&A市場に影響を与える主な原因。

国がより深くそして広く世界市場に統合することによりM&A活動に新たなチャンスを提供しています。

もう一つの要因は特に環太平洋オアートなーシップ(TPP)などの署名した貿易協定に基づき要件を満たす為に国営企業(SoEs)を民営化する政府の強いプレッシャー が挙げられます。

外国投資の奨励兆候は以下の通りです。

  • 経済再起
  • 外国人投資家により幅広いアクセスを許可する政策の改革
  • 2015年終わりにアセアン経済共同体の形成
  • 自由貿易協定(FTA)や環太平洋パートナーシップ(TPP)の締結
  • 株式市場の跳ね返し
  • 上場企業の外国人投資家の許可レベルを増加する新規則

 

新投資法、企業法及びその他の法律や政策の導入により原則として投資や貿易、特にM&A市場に関する法的環境が改善しています。しかし、以下の要因がM&A取引に影響を及ぼしています。

 

  • ベトナムのWTO委員会のような国際条約の地元ライセンス当局による異なる解釈及び履行。
  • 異なるタイプの取引に適用される異なるライセンス手続き(例、外資企業または国内企業、公開会社または非公開会社、国営企業の株式または非公開株式の買収)。

法的そして統治に対する障害やマクロ不安定性や市場の不透明性などが投資家にとって最大の関心事ではありますが、ベトナムにおけるM&A取引はまだ市場参入のための効果的な手段の1つとして期待できるでしょう。

ベトナムのM&A市場において期待される主な傾向は以下が含まれます。

  • 銀行再編
  • 特に不動産分野における買収及び反買収
  • M&A取引を通じベトナムにおける日本及びタイの投資の成長
  • 国営企業の改革

 

金融派生商品市場はリスクを防ぎ、株式市場の成長を後押しし、M&A取引を促進し役立つとされる為2016年に開かれることが期待されています。

 

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上記の内容に関しまして、さらなる詳細やご質問がもしございましたら遠慮なくomassmann@duanemorris.comまでご連絡ください。オリバー マスマンはドウェイン・モリス・ベトナム法律事務所のディレクターです。