Japanese firms have gone on a buying spree, scooping up stakes in some of the leading Vietnamese brands over the past decade. With a mature home market and cash to burn, companies from Japan have invested USD63 billion in mergers and acquisitions.
Sam Yoshida, Cross-Border Division Head at RECOF Corporation and RECOF Vietnam CEO told Voice of Vietnam that Japanese firms will continue to be active in Vietnam for years to come.
“The first trigger is the destiny for Japanese companies to find new markets and expand outside Japan. The fact is that most of the sectors in Japan are already mature,” Yoshida stated. “For instance, almost one-third of the Japanese population is over 65 years old. This makes the average age of Japanese people 48.4 years, almost 20 years older than the figure for Vietnam.”
He added, “The second trigger is ‘M&A as a growth strategy’ which is backed up by the abundant accumulated cash during the last 20 years which reached USD2.34 trillion as bank deposits with almost zero interest rate. Pushed by shareholders’ requirements to make use of the money, these funds have started to flow into the M&A market.”
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What are Japanese firms buying in Vietnam?
Companies from Japan have purchased businesses in the retail; food and beverage; pharmaceutical; real estate; and finance sectors. One of the largest deals saw Sumitomo Mitsui Financial Group purchase a 49 percent stake in FE Credit, Vietnam’s largest consumer finance company.
Kirin Holdings was among the first Japanese firms to enter Vietnam after it acquired a 57.25 percent stake in soft drink producer Interfood in 2012. Meanwhile, Maruha Nichiro purchased Saigon Food earlier this year in order to expand its processed foods presence.
Taisho Pharmaceutical bought its way into the country by buying Hau Giang Pharmaceutical JSC. Vietnam’s largest tissue paper and industrial paper producer, Saigon Paper Corporation, sold a 95 percent stake to Sojitz Corporation.
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