Creating value after M&A

For many businesses, M&A is about continuing their development story, strengthening their capabilities, perfecting their ecosystem, and enhancing their long-term competitiveness.

For many businesses, M&A is about continuing their development story, strengthening their capabilities, perfecting their ecosystem, and enhancing their long-term competitiveness.

M&A helps businesses combine their strengths. In the photo: Gamuda Land's Eaton Park project after acquiring the land from Tam Luc.

M&A to create synergistic strengths

Three years after acquiring shares in AAA Insurance from IAG Group (Australia), Bamboo Capital Group considers this a prime example of a successful M&A deal that the company is proud of, both during and after the acquisition process.

Speaking with a reporter from Investment Newspaper, Mr. Nguyen Tung Lam, General Director of Bamboo Capital, said that at that time, AAA Insurance faced a series of difficulties, with revenue in 2022 reaching only 196 billion VND, the claims process still having many limitations, and customer service not yet optimized.

After the acquisition, Bamboo Capital implemented a comprehensive restructuring strategy, including refreshing its image, messaging, and communication strategy to attract customers. They designed new insurance products to meet market needs; improved customer service processes; and enhanced the claims process to be "fast, accurate, and complete."

M&A is not about "big fish swallowing small fish" or takeover, but about keeping the flame alive to jointly establish a foundation for long-term development.

“In just three years, AAA Insurance has undergone a spectacular transformation, rising from 27th out of 32 non-life insurance companies to the Top 15 best non-life insurance companies in Vietnam. Revenue in 2024 is projected to reach VND 1,500 billion, nearly eight times higher than before Bamboo Capital took over,” Mr. Lam informed.

Further elaborating on the synergistic value after M&A, Ms. Luu Thi Thanh Mau, Vice President of the Vietnam Young Entrepreneurs Association and General Director of Phuc Khang Investment and Construction Joint Stock Company, stated that when forming joint ventures or cooperating with foreign investors, the focus should be on long-term sustainability. That is a smart choice.

Six or seven years ago, Phuc Khang initiated an investment cooperation with Mitsubishi Corporation of Japan and successfully invested in the Diamond Lotus Riverside Project (District 8, Ho Chi Minh City) with 800 apartments meeting international green standards.

“After five years, we have our first child, a green real estate project. With a business philosophy of safety and sustainability, we met Mitsubishi, a partner with the same philosophy,” Ms. Mau shared.

According to this businessman, Japanese investors are demanding, but once a business partners with them, it will benefit greatly and grow significantly.

As for Coteccons – a giant in the construction industry – in 2024, it completed the acquisition of 100% of the capital contributions of two companies: Sinh Nam Metal (Vietnam) Co., Ltd. and UG Vietnam Mechanical and Electrical Co., Ltd. (UG M&E). Ms. Nguyen Tran Thuc Anh, Investment Director of Covestcons (a subsidiary of Coteccons), said: “Both companies are long-standing partners of Covestcons. During their operation, they have both created a certain legacy and have been recognized by their partners.”

According to Ms. Thuc Anh, the negotiations are complete, but the deal is not yet closed. The value the company aims to build is a long-term endeavor after the transaction. Therefore, the company leverages the inherent strengths of both parties to create value for each other and for society.

"Our approach is not simply about M&A like big fish swallowing small fish or takeovers; we follow the motto 'Keep the fire burning' – meaning we keep the flame alive to jointly establish a foundation for long-term development," added Ms. Thuc Anh.

Strategies for successful M&A deals

Decoding the strategies for success in M&A deals, Ms. Luu Thi Thanh Mau concluded that there are three key things to manage.

Firstly, it's essential to set clear objectives before working with foreign investors. When dealing with foreign companies, it's crucial to be well-prepared and maintain a strong work ethic and transparency. Money matters should come last; benefits will follow.

Secondly, how to manage change. When Phuc Khang worked with Mitsubishi – a 9-year-old company against a 130-year-old company – they sent an email at 2 AM on the second day of Tet (Lunar New Year), forcing the company to work on the second day of Tet for the collaboration to be successful.

Thirdly, it is necessary to manage objectives, standards, and development models. Instead of waiting domestically, businesses need to proactively seek out the resources they lack and find levers to help them grow stronger, just like foreign businesses.

Based on her business experience, Ms. Mau learned that to succeed in M&A, one should act with pure motivation and with all their heart, even if the profit margin may be low.

Mr. Angus Liew, Chairman of the Board of Directors of Gamuda Land Vietnam, stated that all M&A transactions are valuable lessons. Gamuda Land has participated in 6 acquisition and 6 sale transactions, from which it has gained valuable experience.

To successfully execute an M&A, Angus Liew emphasized three key factors. First, anticipate the unpredictable. This is because the negotiation process in M&A always involves many unforeseen elements.

Therefore, a contingency plan (plan B) is necessary to respond to unexpected risks. Thorough preparation and foresight will help minimize the impact of undesirable situations.

Next is choosing a reputable consulting firm. According to Mr. Liew, selecting a consulting firm is a crucial factor in M&A. A strong and experienced consulting company will help expedite the process and navigate complex regulations. Mistakes in choosing a consultant can lead to the failure of the entire transaction.

Finally, flexibility and patience are key, because M&A is never a straight path. To achieve success, the parties involved must be flexible and support each other throughout the process. It may take time, but patience is key. If you want to go fast, you have to go slowly.

Ms. Binh Le, General Director and Head of M&A Department at ASART Transaction Consulting Company, stated that consultants should not only connect parties but also understand each party's strategic vision, how the two sides came together, and how they established a common direction... only then can post-transaction outcomes and crucial decisions be made.

"For significant, large-scale transactions, even investors require businesses to have consultants, because they don't want to participate in a game where they have to dictate how the other party plays. Anticipating numerous risks demonstrates the crucial importance of consulting," Ms. Binh Le emphasized.

Source: https://baodautu.vn/kien-tao-gia-tri-hau-ma-d231463.html