UPBEAT PICTURE DRAWN FOR GROWTH IN M&AS

As global dealmaking activity shows steady signs of recovery, Vietnam is witnessing a surge of investor confidence and record-breaking deal values – a signal that capital flows are shifting towards emerging and resilient economies.

According to a 2025 global report from Boston Consulting Group (BCG) published in the last days of October, the total value of global merger and acquisition (M&A) transactions reached $1.94 trillion in the first nine months of the year, up 10 per cent from the same period in 2024.

Despite lingering headwinds such as shifting United States tariff policies as well as geopolitical tensions, this marks the second consecutive year of growth and the strongest performance since 2022.

North America continued to dominate, accounting for more than 60 per cent of global deal value, rising by over a quarter on-year to $1.2 trillion.

Europe, however, recorded a slight decline, with deal values down 5 per cent to $375 billion.

The Asia-Pacific region saw overall deal values dip to a 10-year low of $284 billion, though analysts say the downturn masks significant intra-regional divergence.

Technology, media, and telecommunications led the pack globally, driving $536 billion worth of transactions, followed by financial services and real estate. BCG notes that dealmakers are becoming more selective, favouring strategic acquisitions that enable long-term growth rather than short-term cost savings.

“While headwinds such as geopolitical tensions and changing tariff policies have caused some dealmakers to pause their plans, many others have pressed forward strategically,” the report observed.

Although the overall total remains below pre-pandemic highs, roughly 40 per cent below the 2021 peak, analysts believe that this year marks a turning point for global M&A as investor appetite returns and interest rates begin to stabilise.

In Vietnam, the momentum is even stronger. According to the Foreign Investment Agency (FIA) under the Ministry of Finance, foreign investors poured $5.34 billion into capital contributions and share purchases in the first 10 months of 2025, a sharp 45 per cent increase on-year.

Among the standout deals was a $200 million investment by Malaysia’s Oryz Boutique in a food and beverage venture in Ho Chi Minh City, marking one of the largest service-sector transactions this year.

The FIA noted that although global foreign investment flows are narrowing and focusing on quality, Vietnam still has opportunities in the wave of regional production relocation, especially in key sectors such as electronic components, medical equipment and renewable energy.

“Although newly registered capital decreased, adjusted capital increased sharply by 45 per cent and capital contribution and share purchase increased by 45.1 per cent. This indicates that new investors are more cautious when starting projects in Vietnam due to fluctuations in the global market, but existing projects have significantly expanded in scale,” the FIA reported.

Foreign investors are increasingly at the forefront of Vietnam’s M&A boom. Savills Vietnam reports that international corporations continue to dominate blockbuster transactions, driven by deep capital reserves and long-term investment horizons.

“Foreign investors are not just seeking assets; they are seeking footholds in Vietnam’s long-term growth story,” noted a market analyst from Savills.

Despite the upbeat momentum, investors, particularly European firms, say Vietnam’s M&A framework still faces procedural ambiguities that could hinder larger and more complex deals.

The M&A legal group of the European Chamber of Commerce in Vietnam (EuroCham) pointed out challenges persist in three key areas: labour implications, transaction approvals, and administrative consistency.

Specifically, current labour laws remain unclear on when a transaction affects the employment of multiple employees, it said, leading to confusion about when consultations with labour unions or employee representatives are required.

Furthermore, labour contracts in asset sales are not automatically transferred, necessitating new agreements that can delay closing timelines.

The EuroCham group offered some recommendations, including clarifying the definition of “impact on employment” and specify numerical thresholds or percentages that trigger labour plans; establishing dispute-resolution mechanisms for disagreements between employers and employee organisations; and permitting the automatic transfer of labour contracts in asset deals, with suitable compensation measures to protect affected workers.

European investors have also raised concerns about inconsistent local practices regarding M&A approvals and document authentication, such as signature and stamping requirements, which vary across provinces.

EuroCham has proposed standardising signing and stamping rules nationwide and eliminating redundant procedures like page-by-page initials; promoting e-document submissions to streamline approval; clarifying exactly when official approval is legally required; and creating an online consultation platform where investors can seek official guidance from relevant authorities.

Source: VIR