Develop mergers and acquisitions in Vietnam finance and banking sector (Phát triển hoạt động mua bán và sáp nhập trong lĩnh vực tài chính ngân hàng Việt Nam)

1

INTRODUCTION
1. Reason to select the topic
Mergers and acquisitions (M&A) came to the world early and
popularly in many developed economics. They are leaded by US's banking
& finance sector followed by Europe, Latin American and finally Asian
countries.
In Vietnam, after nearly 30 years of economic reform, it may seem to
be a time for its economy toward readiness for new economic development
circle (since 2011). Vietnam's financial & banking institutions system has
gained lots of significant achievements for the last years, contributing to its
national economic growth. Yet, these institutions also revealed a few of
shortcomings, such as low charter capital and liquidity, high bad debts,
weak management, human resources below international standards. This
status requires reorganization, restructure of commercial banks, securities
companies and insurance company in particular.
The M&A brings more benefits for not financial institutions but the
general economy. Yet, the M&A has really developed in Vietnam for the
last 7 years, so it seems new practically and theoretically. Several recent
researches just dealt with certain respects, contents but focused on deep,
systematical studies for the entire finance and banking in Vietnamese
market. Therefore, the writer chose the topic "Develop mergers and
acquisitions in finance & banking industry in Vietnam" for my doctoral
thesis.
2. Research objectives and questions
- General research objectives: To propose feasible solutions and
recommendations to develop the mergers and acquisitions in Vietnam
finance & banking sector.
- Specific objectives:

2

 Study theoretical M&A theories and its development in the finance
and banking sector.
 Analyze real state of M&A development in Vietnam finance and
banking sector.
 Evaluate M&A development in Vietnam finance and banking
sector based on increase in quantity, value and quality of
transactions in Vietnam's finance and banking.
 Evaluate M&A impacts on business outcomes of financial firms.
 Forecast M&A perspectives in Vietnam's finance and banking
 Suggest and recommend to M&A development in Vietnam's
finance and banking toward the year 2020.
3. Subject and scope of research
- Research subject: M&A and its development in Vietnam's finance and
banking
- Research scope: the M&A in Vietnam's finance and banking with three
financial immediate groups including Commercial Banks, Securities
Companies and Insurance companies
- Duration of research: From 2007 to 2013. Proposals and
recommendations till 2020.
4. New contributions of the thesis
 The writer chooses an approach to M&A in scope of three
immediate financial organizations including commercial banks,
securities companies and insurance companies.
 In this thesis, 25 financial criteria of 22 organizations are applied to
analyze, evaluate and show positive impacts of mergers and
acquisitions on the enterprises' operating results after the M&A
transaction.

3

 The thesis writer conducted a questionnaire survey to find
relationship between the enterprise's business and the M&A
development in the finance and banking sector.
 The writer made full use of Probit model (Quantitative regression)
to evaluate and prove the M&A's positive impacts on the financial
institution's operating results.
 The writer evaluated the M&A and its development in Vietnam's
finance and banking in period of 2007-2013. From that, proposals
and recommendations were given to the M&A development in
Vietnam's finance and banking till 2020.
5. Thesis outline
Besides preamble, conclusion, table of contents, lists, the Thesis is
outlined with 4 chapters:
Chapter 1: Overview of research works and research methodology of
the thesis
Chapter 2: Theoretical basis of the mergers and acquisitions in the
finance and banking sector
Chapter 3: Real state of the mergers and acquisitions in Vietnam
finance and banking sector
Chapter 4: Several proposals and recommendations to the M&A
development in Vietnam finance and banking sector till 2020.
CHAPTER 1
OVERVIEW OF RESEARCH WORKS AND RESEARCH
METHODOLOGY OF THE THESIS
1.1 Research works in Vietnam
Recently, some Vietnamese researchers have been studying mergers
and acquisitions at home. Nevertheless, number of these researchers is

limited and they just pay attention to certain aspects. Therefore, research on

4

this activity and its development in the entire finance and banking sector,
especially three institutional groups of commercial banks, securities
companies and insurance companies, is still new. In this thesis, 12 domestic
works were studied, typically as follows:
Tran Ai Phuong (2008), "Solutions to boost up the mergers and
acquisitions in banking in direction of founding the banking and financial
group in Vietnam". Her research evaluated the mergers and acquisitions as
an opportunity for banks to accelerate their profits, to create new income
sources, to meet the globalization tendency, to enable them to build and
develop their brand promotion strategies, to raise scope-based economic
goodwill and then to gain economic advantages from the opportunities.
Vuong Hoang Quan, Tran Tri Dung and Nguyen Thi Chau Ha (2009),
"Mergers and acquisitions market in process of Vietnam's economic
transition". This work delved into the M&A in Vietnam in respect to
quantity and value of transaction, some limitations and cause analysis.
Nevertheless, their research was just conducted on the most basic aspects
rather than concentrating on specific sectors, for example, finance and
banking.
Harry Hoan Tran CFA and Thuan Nguyen FCCA, "In which direction
does restructuring Vietnam's banking system follow?", said that Vietnam
commercial banks were faced with serious problems, such as poor assets
quality, difficulties in liquidity, low profit quality, weak management and
risk management. This research is limited by just addressing real status of
some banks of Vietnam but having an overview of the entire financial
sector.
1.2 Research works in other countries

The M&A is relative universal in the world, especially the financial
transactions. Eighteen foreign works were studied, typically as follows:

5

Stevens, K.L., (1973), "Financial Factors in Mergers and Acquisitions"
represented quantitative analysis of some financial factors in decision of
mergers and acquisitions in model of seven independent variables that are
(1) Growth rate of the enterprise, (2) Capital scale, (3) Profit, (4) Financial
lever, (5) Dividend policies, (6) Stock liquidity, (7) Scale of stock market.
By such model, the writer is sure that profit and capital scale have the
greatest influence on M&A of the enterprise.
Neter, J and Wasserman (1974), "Applied Liner Statistical Models in
banking and finance mergers" represented the probability model in banking
and finance mergers and acquisitions on basis of evaluation on independent
financial variables that may affect the financial institution's probability of
M&A.
Neely Walter (1987), "Banking acquisitions: Acquirer and Target
Shareholder Return" affirmed that banks needed growth in business cycle
to maintain and expand their market share, to generate economic advantage
and to bring about earnings to the shareholders. During such progress,
mergers and acquisitions reserve roles to help the enterprise grow faster
than its competitors and limit its unability to generate income to their
shareholders or to declare itself bankrupt.
Robert G. Eccles and Thomas C. Willson (2005, "Valuation Security
Analysis for Investment and Corporate Finance" mentioned corporate
valuation, including sharing-value gained by the enterprise from mergers
and acquisitions. This work counted and indicated basis of sharing value of
an M&A transaction or by calculating the sharing value obtained by the
enterprise from the M&A.

Jefferson Wells (2009), "Mergers and Acquisition: Turing your vision
into reality", conducted deep analysis on reality of M&A transactions in the
world.

6

Those aforesaid works mostly turned around different aspects of M&A
in the financial institutions, which are highly valuable experiences to
realize business transactions in the world and my thesis shall succeed to
theoretical and practical knowledge.
1.3 Research methodology
1.3.1 Approach to research subject
General M&A in finance and banking are researched, of which M&A is
an important financial solution to improving the business picture of the
financial enterprise.
1.3.2 Database
* Secondary data: audited financial statements and data from reputable
financial institutions.
* Primary data: Survey questionnaires were distributed to 833 staff of
financial services from 01/06/2012 to 31/12/2013.
1.3.3 Data collecting method
A survey was carried out with participation of 833 staff of financial
services under 34 banks and their affiliates, 16 securities companies, 7
insurance companies, 10 financial companies and 22 finance-related
entities.
1.3.4 Method of data processing and analyzing
Statistical description, economic consolidation and analysis,
comparative research and logical method, method of analyzing gathered
documents by logical structure, methods of investigation, statistics,
modelling and mathematic statistic inspection method.

CHAPTER 2: THEORETICAL BASIS OF THE MERGERS AND
ACQUISITIONS IN THE FINANCE AND BANKING SECTOR
2.1 Overview of finance and banking
2.1.1 Finance and banking

7

The finance and banking are deemed as a capital circulation system
which is integral to the economy, with main activities such as money,
credit, payment, funding
2.1.2 Intermediate financial institutions
Commercial bank is an intermediate financial institution which receives
deposits and then using them for lending, discount and others
Securities Companies is one of intermediate financial institutions which
specialize in securities operations.
Insurance company is an entity in charge of payment, disbursement of a
claim for risks, damages of the object insured.
2.2. Mergers and acquisitions in the finance and banking
2.2.1 Concept of mergers and acquisitions
Mergers mean two or more enterprises reaching an agreement to share
their assets, market, and brand in order to establish a new enterprise with
new name and to put an end to existence of former enterprises.
Acquisitions refer to a fact that an enterprise buys up or takes over
another enterprise but not forming a new entity.
Common points of mergers and acquisitions are to create a new
enterprise with much higher value than each initial single enterprise.
2.2.2 Mergers and acquisitions form
There are many bases to sort the mergers and acquisitions forms, for
example, concerned subjects, purpose of the transaction, financial term,
nature and territorial scope.

2.2.3 M&A mode
M&A can be implemented by any of the following methods: biding,
voluntary negotiation with executive and management boards, inducing
dissatisfied shareholders, purchasing the enterprise's assets or buying stocks
on the stock market.

8

2.2.4 M&A process
* The M&A process is divided into 6 stages: (1) Initial evaluation on the
enterprise's business, (2) Propose a mergers plan, (3) Official cooperation
agreement, (4) Valuating and pricing the enterprise, (5) Signing and
performing the contract, and (6) Settle post-mergers problems.
* Price an enterprise in M&A.
Value of M&A enterprise is calculated by sharing and real values.
The sharing value is calculated and considered with 5 criteria, that are
revenue improvement, cost saving, innovation of operating process,
generation of financial and tax benefits.
The real value may be calculated by lots of methods subject to each
case, for example, valuating by internal value/ by assets, by profitability
and by ratio of price over income.
2.3 Develop M&A in finance and banking
2.3.1 Definition of M&A development
M&A development is defined as a measure of increase in quantity,
quality and value of acquisitions transactions.
2.3.2 Necessity of M&A development in the finance and banking
For the economy, the M&A development makes contribution to
heighten dynamics of financial market, to create a foundation for evolution
of assistant services, to raise the State budget, to create a channel to
mobilize foreign resources, which is an important solution to restructure of

national economy and finance.
For the enterprise, the M&A seems a foundation for the enterprise's
market enlargement, marketing cost saving, full use of high-quality human
resources, accumulation of financial funding, raising competitive capacity,
absorption of technical transfer, control level and realization of value chain
switching strategy.

9

2.3.3 Evaluation criteria for M&A development in the finance and
banking
Quantity and value of the transaction: The quantity and value are
considered relatively or absolutely. If the data are calculated and showed
that subsequent period's data are higher than the previous one, this means
that the M&A is developing. Conversely, if absolute and relative growth
criteria of the M&A in this period are lower than the previous one, this
means that drop in quality of transactions is indicated by comparing the two
periods.
Transaction quality: this criterion is represented by the sharing value
which the companies want from the M&A. It can be seen via the
enterprise's financial position by comparing before and after the M&A.
2.4 Factors affect the M&A in finance and banking
2.4.1 External factors: institutional environment, economic environment,
socio-cultural environment, engineering environment, technology in the
finance and banking.
2.4.2 Internal factors: financial position, competitive capacity and risk
control.
CHAPTER 3
REAL STATE OF THE MERGERS AND ACQUISITIONS IN
VIETNAM FINANCE AND BANKING SECTOR

3.1 Overview of finance and banking in Vietnam
3.1.1 History of establishment and evolution
Evolution of Vietnamese banking system may be divided into 4 phases
including French domination, North of Vietnam (1954-1975), South of
Vietnam (1954-1975) and after-national-unity in 1975 till now.
The stock market in Vietnam had embryonic sign of establishment
since 1993 through set-up of capital market research and development

10

board, the National Securities Commission (in 1999), open for securities
trading centre (2000), letting the National Securities Commission be under
management of Ministry of Finance (2004) and official open for Hanoi
Stock Exchange in 2005.
Vietnam insurance sector came to the world in 1880 as it may be, when
Foreign Insurance Associations, for example Insurance Associations of
Britain, France, Switzerland, and USA began to say about the Indochina
region. Yet, since 1952, the insurance services were expanded with
participation of many domestic and foreign insurance companies.
3.1.2 Vietnam's finance and banking in the recent past
At present, in Vietnam, there are four State-own commercial banks
which have been capitalized and of which the Government holds governing
shares; 01 State-owner commercial bank (Agribank), 1 social policy bank,
1 bank for development of Vietnam, 1 cooperative bank, 34 joint stock
commercial banks, 4 joint-venture banks, 5 banks with 100% foreign
capital and 50 branches of overseas banks, with total charter capital of
banking system at 225,605 billion VND. The stock market has 95
companies with total charter capital of 36,325 billion VND; and the
insurance market has 59 companies with total charter capital of 32,484
billion VND. In total, Vietnam's finance and banking have about 294,414

billion VND. However, Vietnam's finance and banking were faced with
many difficulties in the last period, such as poor operating results, low
liquidity, poor quality of assets and high credit risks.
3.2 Real state of M&A in the finance and banking of Vietnam.
* Before 1997
In this period, M&A transactions began to appear in Vietnam's finance.
Implementation method was not from the parties' desires but from

11

compulsory decision by the Government's agencies to solve the credit
organizations' difficulties at that time.
* From 1997 to 2005
This period was a beginning of M&A in Vietnam's finance and banking
in spite of restrictive quantity. The popular method was that financial
institutions purchased small banks. After pricing, value negotiation, under
instruction of competent agencies, the purchased entity became a part of
purchasing entity. M&A in this period was characterized by compulsory
decision of the competent agencies for purpose of helping the enterprises
overcome difficulties but resulting from competition among entities.
*From 2005 to 2007
In the period 2005-2007, Vietnam began to enact legal regulations on
M&A so application of such documents had not been clever. M&A
transactions were performed by different procedures. Corporate pricing was
just based on traditional value without specific standards or guidance from
the competent agencies.
* From 2007 to present
This is a period of ups and downs in Vietnam's economy and finance &
banking. Yet, this is also a chance for potential M&A development.
Together with enaction of Investment Law 2005, Enterprise Law 2005,

Securities law 2006, the finance M&A officially prospers in the period of
2007-2013.
The M&A transactions in this period just referred to sale of shares to
foreign partners for attraction of financial resources. There were 05
transactions considered as true M&A, including: Mergers of Post Saving
Service Company into Lien Viet Joint Stock Commercial Bank to form
LienVietPostBank; Mergers of 3 banks of De Nhat - Tin Nghia - Sai Gon
into Sai Gon Joint Stock Commercial Bank; Mergers of Hanoi Housing

12

Joint Stock Commercial Bank and Sai Gon Hanoi Joint Stock Commercial
Bank SHB; the transaction between PVFC and Westernbank, HDBank and
DaiABank. In general, the banking M&A in this period made positive
benefits, such as: enhancement of competitive capacity, market expansion,
and receipt of technology transfer, operations and support of business cost
reduction for the entities.
Unlike banking M&A, the M&A in securities companies seemed
somber. Nevertheless, the M&A prospects in Vietnam securities companies
remain large on assessing their financial capacity and number of companies
in the market. The securities M&A is just of type where domestic securities
companies sell shareholders to foreign partners.
In respect to the insurance company, the M&A activities are relatively
scattered with a few transactions. Yet, acceleration in number of companies
resulted in lack of qualified personnel, unfair competition which require
the insurance firms to join hands by the M&A solution.
3.3 Assessment on M&A development in Vietnam's finance and
banking
3.3.1 Quantity and value of M&A transactions
Quantity and value of M&A in Vietnam's finance and banking have

accelerated in period of 2007-2013. In 2007, the value was 482 million
USD but it dropped down in 2008, 2009, 2010 due to impacts from global
financial crisis. However, by 2011, M&A value reached to the highest at
3.2 billion USD with 18 transactions. Compared with previous years, in
2009 there were 44 transactions worth 303 million USD while in 2011,
there were 18 transactions worth 3.2 billion USD and in 2012, with only 5
transactions, and the financial scale amounted to 1.3 billion USD. In 2013,
number of finance M&A transactions was 10 amounting to 683 million
USD, which is less than the year 2012 because M&A among domestic

13

financial institutions was for re-structure and there was no great transaction
of share as in the year 2012.









Source: Asia Venture Capital Journal, PWC Asia Financial Services M&A Report SoxPlus Vietnam, Capital IQ
Chart 3.1: M&A transactions in Vietnam finance and banking sector
from 2007 to 2013
Increasing in quantity and value of M&A transactions in the finance and
banking comes from the better signals of the financial market when the
restructuring work is concentrated. Additionally, legal documentation
system and market opening policy for the foreigner investor are clearer.

3.3.2 Quality of M&A transactions in Vietnam's finance and banking
* Problem
Quality of M&A transactions in the period of 2007-present is regarded
on 2 angles of reality survey and actual operating results of the financial
companies before and after M&A.
* Evaluation on M&A quality in the finance and banking of Vietnam
The investigation and survey showed that up to 77.8% answerers
consented that the M&A would help the enterprises to enhance their
operating efficiency; that 70% answerers concurred with the viewpoint that
M&A would enable the enterprises to grow in scale. So, the survey

14

indicated that most of financial experts trusted M&A as a useful financial
tool for the entities in the period of difficult business as present.
Through the enterprises' operating results:
On evaluating 25 financial criteria of 22 M&A enterprises in the
market, it can be seen that most of financial results of the enterprises after
M&A are better than before M&A.
In this thesis, Probit model is also deeply assessed to show close
relationship between the enterprise's existing financial position and
probability of M&A. Model outcomes with selected financial variables are
of statistic meaning.
Here are estimated results from the model
F(I
i
= -0.1844 + 0.4992VONSH + 0.1974DTHU + 0.1694TS - 0.1157LNT
- 0.0005ROE + 0.0041NOXAU - 0.4129 DUNO)
In this model, there are 7 variables which have considerable impacts on
the enterprise's M&A probability with level of statistic meanings at 0.0032;

0.0010; 0.0048; 0.0047; 0.0094; 0.0091; 0.0074 respectively. This model's
variables are entirely significant to explain development of M&A
transactions in the finance and banking of Vietnam.
3.3.3 General conclusion about M&A development in Vietnam's finance
and banking
Achievements
* Macro aspect: M&A is a tool having positive contributions to
restructure of Vietnam's finance and banking system in recent time,
partially heightening competitive capacity of Vietnam's financial market,
attracting the foreign capital sources, boosting up the securities market and
contributing to finalization of legal corridor.
* Micro aspect: M&A creates opportunities for the entities to raise their
operating efficiency, to help small entities not declare bankrupt, to raise

15

capital safety ratio, to enhance competitive capacity, to enlarge scale, to
raise position, to enlarge network and base of customers.
Limits and cause
* Macro aspect: legal framework for M&A is deficient; regulations on
ownership rate for the foreign investors are restricted; and quality of human
resources is weak.
* Micro aspect: M&A methods are unprofessional, with no standard
procedures, difficulties in pricing, lack of M&A personnel, limited M&A
knowledge, dubious information and lack of intermediate consultants.
CHAPTER 4. SEVERAL PROPOSALS AND
RECOMMENDATIONS TO THE M&A DEVELOPMENT IN
VIETNAM FINANCE AND BANKING SECTOR TILL 2020
4.1 Prospect of M&A development in Vietnam's finance and banking
 Global economic crisis gives an opportunity for M&A

development.
 Secondly, legal, business environment in Vietnam have been better
and better, which create chance to attract foreign sources via M&A.
 Thirdly, quantity of financial institutions in Vietnam is relatively
high.
 Fourthly, M&A is a good choice for the market penetration.
 Fifthly, M&A enables the enterprises to stand firm on the market.
 Sixthly, restructuring Vietnam's economy is performed with one of
three focuses that is to restructure the financial system with
concentration on M&A solutions.
 Seventhly, there is a tendency to set up multiple sector groups,
where the entities are interested in M&A as a strategy.
4.2 Several proposals and recommendations to the M&A development
in Vietnam finance and banking sector till 2020

16

4.2.1 Proposals to the Government and competent agencies
Finalize specific regulations and legal framework
 Intensify research, building of legal system in order to create
favourable conditions for re-organization and quality improvement
through the M&A.
 Enact regulations related to M&A in regard of contents rather than
formal setting;
 Legal procedures of M&A should be more flexible on
consideration and approval;
 Complete the legal basis to control negative impacts of M&A;
 Stipulate more diversified types of M&A;
 Specify responsibilities among stakeholders;
Study on amplitude and time to raise rate of share capital ownership of

the foreign investors in the financial institutions
The Government should consider loosening banking room up to 49%
and adjusting "room" once per 2, 3 years, according to the routine. Time by
time, ownership ratio shall be raised to 51%, 75% and completely open in
2020. For securities companies and insurance companies, it should be also
considered the foreign investors' ownership of 49%, even of 100% of
charter capital. Each case must obtain approval from Ministry of Finance.
Disseminate M&A knowledge and encourage the entities to implement
M&A actively in various manners.
The competent agencies should be active to disseminate M&A
knowledge in order to raise the financial subjects' awareness and to create
favourable conditions for the entities to perform the M&A transactions in
various manners.
Enact the standard procedures for M&A transactions in Vietnam

17

The thesis suggests a standard M&A procedure of 8 steps and supporting
solutions for this suggestion. (1) Build specific strategies, targets for the
M&A transaction; (2) Specify type of company for the M&A; (3) Learn
about legal affairs related to the enterprise; (4) Assess matters about
corporate finance; (5) Determine mode of M&A transaction; (6) Price,
evaluate the enterprise; (7) Negotiate and sign the M&A contract; (8) Solve
after-merger problems.
Promulgate specific instructions and guidance on merger and
acquisition
Collected financial data should be carefully reviewed and assessed in
combination with various pricing methods in order to evaluate the
enterprise and to quantify inputs on basis of reasonable adjustments.
Promulgate compulsory regulations on transparency and disclosure of

corporate financial information
The information should be disclosed truthfully and accurately on
monthly, quarterly, annual basis in order to ensure every person, entity to
access to the information. Simultaneously, the agencies should issue
penalty regulations for any entity's non-compliance with regulations on
information disclosure.
Encourage establishment of professional M&A consultants
 Allow the securities Companies, commercial banks, auditing
Companies to offer the M&A consultant services when they are
qualified.
 Offer preferential tax policies for M&A services suppliers in the first
years of business.
 Create favourable conditions and support establishment of
professional consultant organizations.
4.2.2 Recommendations to the financial and banking institutions

18

Build specific M&A strategies, plans, targets
The enterprises should determine to perform M&A for long-time or
short-time purposes; they should build feasible M&A and avoid
unnecessary spreading; they need to identify the matters, for example tax,
accounting, assets conversion, profit distribution, liabilities for debts,
personnel, ; drawing up a detailed plan for any potential matter after the
M&A.
Closely obey regulations on transparency and disclosure of
information
The entity should register their stocks in the centralized stock market
quickly in order to meet the information disclosure standards.
Closely cooperate with the consultants during the M&A process

It is essential to identify type of M&A transaction correctly which the
entity expects to implement; to employ the consultants to support the legal
and financial inspection; to employ the consultants to prepare and draft
provisions of the M&A contract adequately.
Raise the enterprise's personnel qualification
The financial institutions should have a plan for personnel training at
home and abroad in respect to the M&A. Such training should be offered
and executed at all levels from key leaders, managers to operating staff.
4.2.3 Recommendations to the competent agencies
Common recommendations
Some common recommendations to the competent agencies: (1) close
cooperation between the competent agencies in order to raise the financial
institutions' competitive capacity; (2) Better and amend the legal
framework for M&A properly fitting for Vietnam's commitments about
finance liberalization; (3) Build a plan to disseminate the laws on banking
and finance in period of integration; (4) Take interest in financial

19

information disclosure with specific regulations; (5) Enhance the
Government's supervision on the financial institution's activities; (6)
Encourage the institutions to be more active in mergers and acquisitions
with tax preference, reduction in compulsory reserve ratio.
Specific recommendations
* To the Government: enhance awareness of M&A role in the finance
and banking; promulgate specific legal documents for M&A; build
Vietnam's M&A development strategy till 2020 and vision to 2030; set up
an M&A commission; standardize the financial accounting criteria;
consider M&A as a prior financial solution in re-organization of the
enterprises; provide explicit guidance on pricing method, valuation of the

enterprise; and concentrate on development of human resources for M&A
market.
* To Ministry of Finance: Ministry of Finance needs to build an IFRS
based routine, to found an agency in charge of M&A affairs, and punctually
promulgate relevant guidance and regulations.
* To the State Bank of Vietnam: the State Bank of Vietnam should be
stricter in compulsory mergers, to supervise the share sale plans of the
finance and banking institutions, to control information, and to hold
seminars and workshops frequently to share the M&A knowledge in the
world.
* To the National Securities Commission: The Securities Commission
should issue a routine for the registered companies to execute the M&A,
establish an agency in charge of research, improvement of market liquidity,
submit proposals to the Government about methods of attracting the
external forces.

21

CONCLUSION
In the process of innovation and integration, Vietnam has gained lots of
achievements in any aspect of economy. Besides advantages of the opening
period, there are many difficulties, challenges for the enterprises and the
economy. The global economic crisis in 2008, have still certain impacts, up
to now, on Vietnamese economy, finance. Therefore, a great economic
reformation becomes ever urgent, especially concentrating on restructuring
Vietnam's finance and banking system. One of solutions, instruments
contributing to the enterprise re-organization is the M&A.
The M&A developed truly in Vietnam since the mid of the 2000s
although some M&A transactions had been implemented long ago. This
wave of M&A does not appear by accident but results from growth of

foreign direct and indirect investments as well as active integration of
Vietnamese economy to the world economy. The M&A becomes familiar
to the corporate community and the society, especially, to the financial and
banking enterprises. Besides explicit benefits such as scale enlargement,
improvement of competitive capacity, market expansion many
Vietnamese enterprises evenly regard the M&A as a solution to recover the
investment capital with high profit, prevention from business risks and
hazards in the business environment.
Facing with global economic depression at present, Vietnam is not
exceptional for common difficulties of the region and the world. Many
companies, especially small and medium scale companies, are working
perfunctorily or they cannot but to declare bankrupt, dissolution or to be
merged into another company. With common difficulties of the nation,
Vietnam's finance and banking system is not out of such spiral. The
financial foundation is shaky because the enterprises are facing with
extremely difficult period of the economy, settling lots of problems such as

22

bad assets quality, difficulty in liquidity, low profit quality, weak
management and risk control. As a result, restructuring the finance sector
becomes essential to protect the institutions from falling into insolvency,
exhausted equity, and from that to recover their operating activities, to have
foundation to enable the economy to overcome the crisis. The M&A is
considered as a financial instrument necessary for the finance and banking
restructure and the entire financial system of Vietnam toward sustainable
and stable development of the national finance in background of
integration.
With benefits and opportunities from the M&A instrument for the
economy in general and the finance and banking companies in particular,

the thesis titled "Develop mergers and acquisitions in Vietnam finance &
banking sector" has been conducted in order to describe the M&A
development more explicitly in the finance and banking of Vietnam for the
last time. The thesis has gained the following outcomes:
Firstly, the thesis systematizes important theories of mergers and
acquisitions in the financial and banking institutions and its development in
the finance and banking.
Secondly, it evaluates real state of the M&A in the finance and banking
of Vietnam, especially in breakdown period of finance and banking M&A
in Vietnam from 2007 to 2013.
Thirdly, by survey questionnaires, analysis, assessment, the thesis
shows close relationship between the enterprise's business and probability
of M&A. additionally, analysis on corporate finance indicates that the
M&A has positive impacts on the enterprise's operating results after the
M&A, compared with those before the M&A.
Fourthly, based on theories and practices and survey on finance and
banking M&A in Vietnam, the writer puts forward some proposals and

23

recommendations to develop the finance and banking M&A in Vietnam till
2020.
M&A development in the financial companies represents the company
owner's freedom in trading, decision for his company. In the world, the
M&A is acknowledged in the laws and prescribed sufficiently, specifically,
especially in the countries with high M&A markets, such as: USA, Europe,
Japan However, for Vietnamese market, this is still a new financial
instrument so legal documents have been deficient to make any adjustment.
Nevertheless, its potential development is still large. The writer attempted
to study, summarize, and evaluate the real state of M&A development in

the finance and banking in Vietnam; to consult the experts about potential
development of finance and banking M&A in Vietnam in coming time.
Nevertheless, the thesis cannot avoid all the shortcomings. The writer
highly appreciates valuable comments, ideas of teachers, scientists,
researchers and readers for better quality of thesis.