VietNamNet Bridge – The stable economic development in Vietnam, a large market with high potential, and the political conflicts with North Korea and China are attracting South Korean investment to Vietnam.
Analysts reported a string of M&A deals made by South Korean investors just in the third quarter of the year alone.
CJ Express, a subsidiary of CJ Group, plans to spend $125 million to acquire a 51 percent stake in two maritime shipping and logistics service companies.
Gemadept, the large Vietnamese shipping and logistics firm, and Hoa Sen Group have announced the divestment of all of their stake in Hoa Sen – Gemadept Port. Both of them declined to reveal the name of the buyer, but sources said it is a South Korean conglomerate.
Tae Kwang, a large partner of Nike, reportedly intended to buy a 51 percent stake of Gemadept from a Gemadept shareholder – the Vietnam Investment Group. However, the deal failed as the two sides could not reach any agreement on the transfer price.
In field of personal consumption, Lotte Card, a subsidiary of Lotte Group, is reported negotiating for the takeover of TechcomFinance, the credit card division of Techcombank. The price is no less than tens of millions of dollars.
Prior to that, local newspapers reported that Lotte Group is planning a large-scale investment deal worth 330 billion won to develop Lotte’s shops in Hanoi.
Meanwhile, Mirae Asset Life Insurance stated that it has acquired 50 percent of capital of Prevoir Vietnam, a joint venture between Vietnam and Prevoir insurance at $48.4 million. Prevoir Vietnam is one of 10 of the most prestigious life-insurance companies.
Also in the finance sector, a subsidiary of KB Financial is planning to take over Maritime Securities (MSI) at the price of $33 million. Samsung Securities and Caldera Pacific will become the second largest investors when holding 40 percent of stake in Dragon Capital.
Just within the first six months of 2017, CJ CheilJedang and CJ Food spent $33 million to acquire control in Minh Dat Seafood and Cau Tre Import/Export.
In the first eight months of the year, South Korean investors registered FDI capital of $6 billion, staying the biggest foreign direct investor in Vietnam.
Lotte Group said that the Vietnamese market is promising. In the credit card market, for example, there are only 3 million cardholders out of 90 million people.
Meanwhile, a South Korean newswire, commenting about the investment wave in Vietnam, said one of the reasons that prompt conglomerates like Lotte to push up investment in Vietnam is that they meet difficulties in the Chinese market. To offset the losses and avoid the increasingly high risk in China, Lotte has shifted its focus to Vietnam, where many Korean companies have seen success.