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Main parts:
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Part 1: Global M & A market sponsors
Part 2: Vietnam M&A Market– Synergy: The
Premium for Potential Success
Part 3: M & A Investment Opportunities
Russia's NLMK to buy U.S. firm The latest deal takes Novolipetsk's Novolipetsk, or NLMK, said over 35
Beta Steel for $400 million spending on U.S. assets to nearly $4 percent of Beta Steel's hot-rolled
billion in the last month, after the sheet output is currently sold to pipe
MOSCOW (Reuters) - Novolipetsk $3.5 billion deal to acquire John and tube producers, including John
Steel (NLMKq.L), the Russian steel Maneely Co announced on August Maneely's Atlas Tube division.
maker owned by billionaire Vladimir 13. Beta Steel will supply hot-rolled
Lisin, has agreed to pay $400 million steel for John Maneely's pipe mills. NLMK said it planned to increase
in cash to acquire U.S. hot-rolled hot-rolled coil output at Beta Steel
steel maker Beta Steel and expand "This acquisition is fully in line with by tackling bottlenecks in its existing
its presence in North America. our commitment to develop a strong operations and supplying its own
footprint in the U.S. high value- slabs for re-rolling. Rolling capacity
Novolipetsk, Russia's fourth-largest added finished steel market," is higher than steel melting capacity,
steel maker by volume, said on Novolipetsk Steel's president and so extra slabs are required.
Thursday it would buy the Portage, chief executive, Alexei Lapshin, said.
Indiana-based company from a Beta Steel operates an electric arc
group of private shareholders to The deal, which Novolipetsk will furnace with an annual capacity of
provide feed for another recent U.S. finance from existing funds and 800,000 short tons, or 725,000
acquisition, steel pipe maker John available credit lines, is expected to metric tonnes, plus a hot-rolling mill
Maneely Co. close in the fourth quarter of 2008. with an annual capacity of 1.2
million short tons, or 1.1 million
"Novolipetsk is trying its best to RUSSIAN PRESENCE metric tonnes.
make its U.S. acquisitions vertically
integrated and therefore less Russian steel makers, led by The company sold 602,000 short
exposed to rising raw material input Severstal (CHMFq.L), Evraz Group tons (547,000 metric tonnes) last
prices," UniCredit Aton metals (HK1q.L) and Novolipetsk, have year, generating revenue of $324
analyst Marat Gabitov said. "It will spent over $13 billion buying up million and earnings before interest,
increase profitability." North American steel assets at taxation, depreciation and
relatively low prices due to the amortization (EBITDA) of $21
Steel makers in Russia, the world's weaker dollar. million.
fourth-largest producer, have
acquired around 10 percent of U.S. The billionaire owners of these NLMK reported a first-half net profit
steel-making capacity in the last few companies are now looking of $1.53 billion, up 44 percent on
years as they spend billions of upstream to secure raw materials the same period of 2007.
dollars from record profits betting for their mills. Severstal this month
on steel demand in North America. agreed to buy coal miner PBS Coals (Source: Reuters)
Corp for $1.3 billion.
For the most part, acquiring companies nearly always pay a substantial premium on the stock market value of
the companies they buy. The justification for doing so nearly always boils down to the notion of synergy; a
merger benefits shareholders when a company's post-merger share price increases by the value of potential
synergy.
Let's face it, it would be highly unlikely for rational owners to sell if they would benefit more by not selling. That
means buyers will need to pay a premium if they hope to acquire the company, regardless of what pre-merger
valuation tells them. For sellers, that premium represents their company's future prospects. For buyers, the
premium represents part of the post-merger synergy they expect can be achieved. The following equation offers
a good way to think about synergy and how to determine whether a deal makes sense. The equation solves for
the minimum required synergy:
In other words, the success of a merger is measured by whether the value of the buyer is enhanced by the
action. However, the practical constraints of mergers, which we discuss in part five, often prevent the expected
benefits from being fully achieved. Alas, the synergy promised by deal makers might just fall short.
Hanoi Times - According to the Finance Ministry, VND22,769 billion in capital construction investment
has been disbursed so far through the State Treasury, fulfilling only 26.4 percent of the year’s set
target.
Several ministries and agencies recording a high disbursement rate included the Ministry of Public Security (57.2
percent), the Ministry of Agriculture and Rural Development (30.3 percent) and the Hoa Lac High-Tech Zone (61.1
percent). Nevertheless, 24 units have still not yet disbursed any funds for investment.
Locally, northern Ninh Binh province achieved the highest rate of 72.9 percent, while northern Cao Bang province had
the lowest rate of 4.8 percent.
The Ministry of Finance has asked all ministries, agencies and localities to refund the allocated amount of capital to
the State budget if they failed to disburse any investment for approved projects before June 2008.
Vietnam ’s real estate market is expecting a new wave of investment from Singapore , an official from the Ho Chi
Minh City Real Estate Association (HoREA) said
According to Do Thi Loan, HoREA Secretary General, there are signs that Singaporean investors are planning their
long-term presence in the market of 86 million population after the success of a series of real estate projects in
Vietnam by their countrymen.
Loan pointed to two conferences on real estate markets held in Singapore in March and June where hundreds of
Singaporean investors showed their special interests in the development potential of the Vietnamese market.
Many of them have arrived in Vietnam to study the market and seek partners, she said.
The past two years have seen a strong flow of investment into real estate projects in Vietnam , with many of them
proving to be profitable, such as those invested by Keppel Land, CapitaLand, Banyan Tree, Allgreen Properties, Chip
Eng Seng, GuocoLand, Ascott Group and Amara Holdings.
Keppel Land Group alone has poured over 3 billion USD in 16 real estate projects in the country, with some of fairly
large scale, including the Saigon Centre project comprising of international-class offices, apartments, a hotel and a
shopping centre, and the Estella residential project area in Ho Chi Minh City.
Loan is confident that investors from other countries will also come to Vietnam . “It is the best time now to invest in
the Vietnamese real estate market as the country has just embarked on the urbanization process,” she said.
Central coastal Da Nang city attracted 23 new investment projects totalling 986.5 million USD in the first eight months
of the year.
Of the amount, more than 614 million USD came from 18 foreign direct investment projects. British Virgin Islands was
the largest investor with two projects capitalised at 330 million USD.
Most of the newly-licensed projects involve real estate business and manufacturing electronic components and
headphones.
Da Nang city has so far had 90 FDI projects, worth almost 1.2 billion USD in total. The FDI businesses account for
one-fourth of the city’s total export revenues and between eight to 10 percent of the city’s budget collection. They
play a major role in the city’s industry, tourism-service and seafood processing sectors.
To promote investment, Da Nang will continue to improve its infrastructural facilities, simplify administrative
procedures, offer preferential investment policies, and settle remaining hindrances to investors through regular
dialogues.
(Source: VNA)
Value of Investment
invitation/Capital Whole transference: 120 billion VND
loan/Transference
ICE’s Comment
3.031.951.461.153 VND
Total investment
• Area: 46.89ha
• Construction density: 22%
Planning indicators of the
• Storey height: 7.75
project
• Land use coefficient: 1.69 times
• ...
Current status of the
N/A
project
Economic indicators of the
project: NPV: 99.384.389.067 VND
( NPV, IRR, Return On IRR: 40,8%
Investment (ROI), Time of Period of paying the capital: 1,62 years
return, Pay-back period,
Solvency, etc.)
Value of Investment
invitation/Capital 60% - 100% of the total investment
loan/Transference
ICE’s Comment
ICE’s Commet
ICE’s Comment
Tourism - Resorts
It is a combination of resorts and tourism,
Business fields entertainment and historical & cultural
discovery as well as the world’s modern
amenities and Viet Namese cultural traditions.
Total investment 33 million USD
ICE’s Comment