You are on page 1of 10

Weekly issued to about 82.

000 emails of investors, managers, and investment organizations & groups in Vietnam or overseas

Volunme ICE-08, Friday September 5th, 2008


ICE – the M & A and project investment connection is the source of useful information for
domestic and foreign investors, enterprise owners and corporations. M & A News issued
weekly by ICE will provide information of buying and selling enterprises in all business fields
as well as investment opportunities in projects throughout Vietnam. In addition, ICE Vietnam
M & A News will help foreign investors and enterprise owners to update new investment
policies and new information of the M&A market in Vietnam.

Main parts:
Ads here as
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

PART 1: GLOBAL M&A MARKET


Top Global M&A Deals

Target Acquiror Value ($M)


CNPC Exploration & Development Co PetroChina Co Ltd 11,800.0
Roskilde Bank A/S assets and debts Bankaaktieselskabet af 24. August 2008 7,397.7
IKON Office Solutions Inc Ricoh Americas Corp 1,617.3
Bacteria Sciences Worldwide LLC DLM Capital Investors LLC 1,000.0
Sun World Ltd PetroChina Co Ltd 972.4
600 Gasoline Stations Owned By Conocophillips Pacific Convenience & Fuel LLC 800.0
Bodycote Testing Group CDR Tabasco Ltd 765.2
Axon Group Plc Infosys Technologies Ltd 754.1
WF Capital Holdings Inc Enterprise Acquisition Corp 669.0
Mint Net Pty Ltd Simeka Bus Group Ltd 658.9

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Page 1


Vietnam M & A News – Copyright © 2008 ICE – The Enterprise Trading and International Investment Connection – Issued weekly for domestic
and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M & A News to contribute ideas or place orders via e-
mail.All right reserved. Tel: +84-4-6227724 Email:ice.ma.news@gmail.com Website: www.vni-connection.com
M&A AND INTERNATIONAL INVESTMENT CONNECTION

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.

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Page 2


Vietnam M & A News – Copyright © 2008 ICE – The Enterprise Trading and International Investment Connection – Issued weekly for domestic
and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M & A News to contribute ideas or place orders via e-
mail.All right reserved. Tel: +84-4-6227724 Email:ice.ma.news@gmail.com Website: www.vni-connection.com
M&A AND INTERNATIONAL INVESTMENT CONNECTION

PART 2: VIET NAM AND M&A MARKET

Though mentioned in the Enterprise M&A activities will increase even


Vietnamese enterprises Law in 1999, M&A became more more once the foreign investment
benefit from M&A trend popular in Vietnam only two years influx into the country continues
ago. M&A activities occurred in surging and many foreign investors
almost all fields, particularly in the seek local partners for their plans to
financial-banking sector. penetrate into the market.

According to the Foreign Investment Accordingly, M&A consultancy


Department under the Ministry of services are expected to blossom.
Planning and Investment, the number Many securities companies are
of M&A among domestic enterprises planning to expand into this service,
and between domestic with foreign including An Viet, An Binh and
businesses has rapidly increased. The Vietnam securities companies.
Vietnam ’s leading sanitary napkin
first half of 2007 saw 46 cases with a
maker, Diana Vietnam Joint Stock
total value of 626 million USD, However, M&A activities still face
Company, said its operation has
doubling the figure of the whole many barriers, including an
improved greatly four months after
2006. incomplete legal system regarding
selling a 30 percent stake to the US
the field, particularly regulations on
leading financial group Goldman
The transfer of projects, another the cap of foreign investors’
Sachs.
M&A aspect, is also booming with ownership in M&A contracts;
1,092 projects worth 16.8 billion USD inadequate information of business
Diana Personnel Manager Do Vu
changing hands. operation of both sellers and buyers,
Phuong Anh also said she thinks the
and a lack of experts, advisors and
mergers and acquisitions (M&A)
Director of the Foreign Investment brokers.
approach is attracting Vietnamese
Department Phan Huu Thang In efforts to improve foreign
enterprises as an efficient business
forecast the M&A trend would further investment in both quantity and
solution in the present period of
expand as enterprises are inclined to quality terms, the Ministry of Planning
fierce competition.
making alliance for co-existence and and Investment is drafting a decree
development amidst the fierce on foreign-related M&A in order to
Besides Diana, Vietnam also
competition as a result of make it easier for domestic and
witnessed other large M&A cases
international integration. foreign enterprises to buy shares
recently, such as the Indochina
from each other.
Capital Vietnam Holdings Ltd.’s
acquisition of a 20 percent stake in According to Thang, in next 6-10
the Viet Fashion Company - years, between 35 and 50 percent of
Ninomaxx, and a purchase by four
Vietnamese enterprises will move in (Source: VNA)
foreign investors of 25 percent of the
Export-Import Bank (Eximbank)’s this direction.
charter capital.

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Page 3


Vietnam M & A News – Copyright © 2008 ICE – The Enterprise Trading and International Investment Connection – Issued weekly for domestic
and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M & A News to contribute ideas or place orders via e-
mail.All right reserved. Tel: +84-4-6227724 Email:ice.ma.news@gmail.com Website: www.vni-connection.com
M&A AND INTERNATIONAL INVESTMENT CONNECTION

Synergy: The Premium for Potential Success

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.

(Source: ICE collection)

Vietnam’s Investment Market

Capital disbursement for construction projects fail to meet target

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.

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Page 4


Vietnam M & A News – Copyright © 2008 ICE – The Enterprise Trading and International Investment Connection – Issued weekly for domestic
and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M & A News to contribute ideas or place orders via e-
mail.All right reserved. Tel: +84-4-6227724 Email:ice.ma.news@gmail.com Website: www.vni-connection.com
M&A AND INTERNATIONAL INVESTMENT CONNECTION

Short Investment News

Singaporean investors bet on Vietnamese real estate market

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.

Da Nang city attracts 23 investment projects in eight months

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)

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Page 5


Vietnam M & A News – Copyright © 2008 ICE – The Enterprise Trading and International Investment Connection – Issued weekly for domestic
and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M & A News to contribute ideas or place orders via e-
mail.All right reserved. Tel: +84-4-6227724 Email:ice.ma.news@gmail.com Website: www.vni-connection.com
M&A AND INTERNATIONAL INVESTMENT CONNECTION

PART 3: M & A INVESTMENT OPPORTUNITIES

M&A-36: Calling for investment in or transferring 4-star hotel


construction project
Location Nha Trang
Business fields HOTEL – DANCING HALL – BAR – ETC.

Total investment 120 ~ 160 billion VND


Available legal documents
Completed and sufficient
of the project
Project land status (Legal
documents, Land lease 50 years
period, purposes, etc.)
- Area: 3800 m2
- Construction density: 65%
Planning indicators of the - Storey height: 12
project - Land use coefficient: Type 1
- Construction purposes: 4-star- hotels

Current status of the


project (Already-invested Completed construction to the 4th floor
project items)

Economic indicators of the


project:
( NPV, IRR, Return On
Pay-back period: 05 ~ 07 years
Investment (ROI), Time of
return, Pay-back period,
Solvency, etc.)

- Strategic location (Nha Trang is a


tourism city
Key strong points of the - Land for lease in 50 years. Short pay-
project back period because of lower
transference price and not having to
pay land investment expenses

TRANSFERENCE OF 20-95% PROJECT


Co-operation forms
SHARES OR 50/50 JOINT-VENTURE

Value of Investment
invitation/Capital Whole transference: 120 billion VND
loan/Transference

ICE’s Comment

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Page 6


Vietnam M & A News – Copyright © 2008 ICE – The Enterprise Trading and International Investment Connection – Issued weekly for domestic
and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M & A News to contribute ideas or place orders via e-
mail.All right reserved. Tel: +84-4-6227724 Email:ice.ma.news@gmail.com Website: www.vni-connection.com
M&A AND INTERNATIONAL INVESTMENT CONNECTION

M&A-37: Calling for investment in or transferring Urban area


construction project
- North: National Highway No 32 and
Location
Industrial complex as planned
- Apartment buildings - Offices;
- Villas and garden houses;
Business fields - Combined services and commercial
center;

3.031.951.461.153 VND
Total investment

- Agricultural land suitable for the construction


of urban areas.
Project land status (Legal
- Decision No 1614/QĐ-UBND on land
documents, Land lease
compensation and clearance support issued
period, purposes, etc.)
by Provincial People`s Committee

• 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.)

- Completed legal procedures with competent


bodies.
Key strong points of the
- Urban area with synchronous and modern
project
design
- Great market potential

Co-operation forms Whole or partial transference

Value of Investment
invitation/Capital 60% - 100% of the total investment
loan/Transference

ICE’s Comment

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Page 7


Vietnam M & A News – Copyright © 2008 ICE – The Enterprise Trading and International Investment Connection – Issued weekly for domestic
and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M & A News to contribute ideas or place orders via e-
mail.All right reserved. Tel: +84-4-6227724 Email:ice.ma.news@gmail.com Website: www.vni-connection.com
M&A AND INTERNATIONAL INVESTMENT CONNECTION

M&A -38: Calling for investment in or transferring sport, tourism


and urban area project
Location Phu Tho
Business fields Construction
Total investment 956 million USD
Available legal documents Investment certificate
of the project
Project land status (Legal Land lease period: 50 years
documents, Land lease
period, purposes, etc.)
Planning indicators of the - Area: 1526ha
project - List of work items: golf courts;
villas, resorts; parks; sport
complex; casino; horse-racing, etc
Current status of the N/A
project (Already-invested
project items)

Economic indicators of the N/A


project:
( NPV, IRR, Return On
Investment (ROI), Time of
return, Pay-back period,
Solvency, etc.)

Key strong points of the N/A


project

Co-operation forms (Joint- Investment invitation (It is possible to


venture – Investment transferring the ownership of the project
financing – Whole developer)
transference)

Value of Investment Negotiation


invitation/Capital
loan/Transference

ICE’s Commet

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Page 8


Vietnam M & A News – Copyright © 2008 ICE – The Enterprise Trading and International Investment Connection – Issued weekly for domestic
and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M & A News to contribute ideas or place orders via e-
mail.All right reserved. Tel: +84-4-6227724 Email:ice.ma.news@gmail.com Website: www.vni-connection.com
M&A AND INTERNATIONAL INVESTMENT CONNECTION

M&A-39: Calling for investment in or transferring Hot Mineral


Spring Resort
Location Phu Tho Province

Business fields NURSE – ECO-TOURISM


Total investment 25 millions USD
Available legal Completed
documents of the
project
Project land status Area: 87ha
(Legal documents, Land Land use period: 49 years
lease period, etc.) Purposes: Spa & Resorts; Tourism; Water
parks; Nurse areas, etc.

Planning indicators of - Construction density: Unlimited


the project - Storey height: According to
Construction Laws
- Construction purposes: Villas –
Hospitals – Entertainment centers, etc.
Current status of the Completed clearance and compensation for
project (Already- 93% of the project land
invested project items) Total investment up till now is 6 millions USD

Economic indicators of Pay-back period: 06 years


the project:
( NPV, IRR, Return On
Investment (ROI), Time
of return, Pay-back
period, Solvency, etc.)

Key strong points of the - 80km from Hanoi


project - One of Vietnam’s best hot mineral spring
resources
- Good location, attractive landscape, fresh air
and convenient traffic

Co-operation forms All forms

Value of Investment 19 millions USD/ 8 millions USD


invitation/Capital
loan/Transference

ICE’s Comment

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Page 9


Vietnam M & A News – Copyright © 2008 ICE – The Enterprise Trading and International Investment Connection – Issued weekly for domestic
and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M & A News to contribute ideas or place orders via e-
mail.All right reserved. Tel: +84-4-6227724 Email:ice.ma.news@gmail.com Website: www.vni-connection.com
M&A AND INTERNATIONAL INVESTMENT CONNECTION

M&A-40: Calling for investment in or transferring CivideC


Resort

Location Quang Binh. 35km from Dong Hoi airport.

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

Available legal 1. Decision on approval detail plan of Phong


Nha CivideC project
documents of the 2. Certificate of whole project (attached map)
project 3. Document of Investment project licence
4. Certificate in investment in advance etc..
Land lease period 50 years
- Construction density: N/A
Planning indicators - Storey height: 3
- Land use coefficient: 0.209
of the project
- Construction purposes: Resorts - Tourism
areas
1) Making the border of project
Current status of 2) Exploring bomb in the right bank
3) Mining the geographic in work area
the project
4) Constructing the resort gate with art: betel –
areca – Tree – Stone…
• This land is in the hot point, so could attract
Key strong points and welcome travelers.
• Lying on West- East lobby, so easy to welcome
of the project
travelers from Thailand, Lao, Myanmar,
Malaysia, Singapore …

Co-operation forms - Joint-venture


- Whole transference
Value of
Investment Transference: 6 million USD (included the land
invitation/Capital rental)
loan/Transference

ICE’s Comment

SUCCESS PROMOTION – COMPANY VALUE ENHANCEMENT Page 10


Vietnam M & A News – Copyright © 2008 ICE – The Enterprise Trading and International Investment Connection – Issued weekly for domestic
and foreign investors, enterprise owners and corporations. Please contact ICE’s editors of M & A News to contribute ideas or place orders via e-
mail.All right reserved. Tel: +84-4-6227724 Email:ice.ma.news@gmail.com Website: www.vni-connection.com

You might also like