ASART SHARED VIEW FROM EXPERIENCE WORKING WITH THAI CONGLOMERATES IN VARIOUS M&A PROJECTS

 

In an interview by Forbes Vietnam 3 years ago, our CEO and Head of M&A and Strategy, Binh Le shared her view from experience working with Thai conglomerates in various M&A projects including the transaction where SCG bought Batico. At that time, she mentioned how Thai conglomerates have been preparing, eyeing, and advancing to enter Vietnam market since 1992 and how Vietnamese companies really needed to prepare for the competition that these giant players will bring.  

Coming back to this topic today, it is clear they have been winning in major and attractive markets. The picture from eyeing to winning major and attractive sectors in Vietnam has shown that the decisive M&A strategies of Thai conglomerates is effective.    

Focusing on gaining control to quickly influence strategies and market landscape. 

Having long-term relationships and intensive experience working with Thai conglomerates, Binh Le shared: “Thai conglomerates are proud but serious and realistic. They adapt to Vietnamese environment quickly and many of them including the top executive levels and owners speak fluent Vietnamese. They are fast and determined when they see a good investment opportunity.” 

SCG is an outstanding example of these decisive M&A strategies. They are operating 20 subsidiaries in the cement and building materials, chemicals, and packaging industries (Prime Group, Binh Minh, Duy Tan, TPC Vina, StarCemt, Kraft Vina, Sovi, Batico, and Long Son Petrochemicals…). 

SCG is not the only group who has been expanding through M&A in Vietnam. Other several giants who are dominating their sectors in Vietnam include: C.P Group by Chearavanont family, TCC Group by Charoen Sirivadhanabhakdi (Phu Thai, MM Mega Market, Melia hotel, Sabeco through ThaiBev, Vinamilk through Fraser and Neave), Central Group by Chirathivat family (Big C, Nguyen Kim, Lan Chi Mart), Siam City Cement (Insee), and Thai Oil.  

According to Binh Le, Thai conglomerates have more advantages than investors from US or Europe thanks to its geographical location and cultural resemblance. What also helps them advance faster is their investment principles which focus on gaining control to quickly influence strategies and market landscape. 

Thai’s influence in Vietnamese market has been firmly established and will continue to be strong.  

Thailand has been one of the first foreign investors in Vietnam after the amended Foreign Investment Law went into effect in 1992, and it remains one of the most active strategic investors in the market.  

According to Ministry of Planning and Investment, Thailand is one of the biggest investors in Vietnam with a total accumulated investment of US$13 billion by the end of 2020. This number was more than double compared to 2019 and nearly seven times compared to the 2015-2018 period.   

Although not enough to be in the top 5 biggest investors in Vietnam, Thai investors are dominating many major and attractive sectors such as retails, beverage, packaging, livestock, petrochemical, and solar energy with an average growth rate of 13% over the last decade.   

In the first four months of 2021, the investment amount from Thailand has increased by 20% year-on-year despite the COVID-19 pandemic. This is a significant number and Thai influence is expected to continue to grow strong in Vietnam.  

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