LEGISLATION ON MERGERS AND ACQUISITIONS OF ENTERPRISES – LEGAL FRAMEWORK AND RECOMMENDATIONS FOR IMPROVEMENT (luận văn thạc sỹ luật học)

HO CHI MINH CITY UNIVERSITY OF LAW THE MANAGING BOARD OF SPECIAL TRAINING PROGRAMS  - BACHELOR’S THESIS LEGISLATION ON MERGERS AND ACQUISITIONS OF ENTERPRISES – LEGAL FRAMEWORK AND RECOMMENDATIONS FOR IMPROVEMENT Student Le Thi Hanh Duyen Student ID 1055010063 Class CLC 35 Supervisor Dr Nguyen Anh Tuan HO CHI MINH CITY 2014 I hereby affirm that this thesis is my own study under the supervisor’s guidance All of the information other than my idea to be used or quoted has been acknowledged by means of complete references I would bear full responsibility for my protest July 15th, 2014 Le Thi Hanh Duyen ABBREVIATIONS M&A Mergers and Acquisitions WTO World trade organization US United State of America EU European Union SOE State-Owned Enterprise VND Vietnam Dong USD United State Dollar LLC Liability Limited Company JSC Joint Stock Company Civil Code 2005 Law No 33/2005/QH11 on Civil Law on Securities 2010 Law No 70/2006/QH11 on Securities and Law No 62/2010/QH12 on amending, supplementing a number of articles of Law on Securities 2006 Law on Enterprises 2005 Law No 60/2005/QH11 on Enterprises Law on Investment 2005 Law No 59/2005/QH11 on Investment Law on Competition Law No 27/2004/QH11 on Competition Decree 102/2010/ND-CP Decree No 102/2010/ND-CP on Detailing a number of articles of the law on enterprises Decree 108/2006/ND-CP Decree No 108/2006/ND-CP on Detailing and guiding the implementation of a number of articles of the investment law Decree 116/2005/ND-CP Decree No 116/2005/ND-CP on Detailing the implementation of a number of articles of the competition law Decree 58/2012/ND-CP Decree No 58/2012/ND-CP on Stipulating in detail and guiding the implementation of a number of articles of the securities law and the law amending and supplementing a number of articles of securities law TABLE OF CONTENTS INTRODUCTION CHAPTER 1: THEORETICAL OVERVIEW OF M&A 1.1 Definition of M&A 1.2 Related concepts 1.1.1 Market share 1.1.2 Assets 1.1.3 Foreign investors 1.1.4 Enterprises 1.1.5 Right to control 1.3 Characteristic of M&A transactions 1.4 Legal forms 10 1.4.1 Acquiring the whole company 10 1.4.2 Acquiring capital shares of LLC 11 1.4.3 Acquiring shareholding 11 1.4.4 Public bids 12 1.5 Legal outcomes 13 1.5.1 Merger 13 1.5.2 Consolidation 13 1.5.3 Holding company - Subsidiary 13 CHAPTER 2: LEGAL FRAMEWORK ON M&A OF ENTERPRISES 15 2.1 Whether a M&A transaction can be carried out 15 2.1.1 Economic concentration under Law on Competitive 2004 15 2.1.2 Vietnam’s WTO commitments and ratio of foreign capital 17 2.1.3 Ratio of non State-owned capital in State owned enterprises 19 2.2 Valuation of enterprises 19 2.2.1 General provisions on valuation 19 2.2.2 Valuation of State-owned enterprises 20 2.2.3 Principles of bidding in public bid 22 2.3 M&A contract 22 2.3.1 Pre-contractual agreements 23 2.3.2 Fundamental issues 24 2.3.3 Rights and obligations of contractual parties 25 2.3.4 Methods of payment 25 2.4 Procedures in M&A transaction 26 2.4.1 Procedures for foreign investor 27 2.4.2 Procedures for public bids 28 2.4.3 Procedures for transferring capital share 28 2.4.4 Procedures for transferring shareholding 29 2.4.5 Procedures for merger and consolidation 29 CHAPTER 3: RECOMMENDATIONS FOR IMPROVEMENT 31 3.1 M&A market in Vietnam and orientations 31 3.2 Review of legal framework on M&A 33 3.3 Recommendations 34 3.3.1 Unifying the definitions 34 3.3.2 Enhance the market opening 35 3.3.3 Criterion to determine the obligation of notification to Competition Administrative Body 36 3.3.4 Supplementing regulations 37 3.3.5 Simplifying procedures 37 3.3.6 Codifying legislations 38 CONCLUSION 39 INTRODUCTION The necessity of research For requirements of the modern economy, the enterprises are always maturing to survival Some of them choose a long-term plan to build their technology, brand, market share, etc… while some of them use mergers and acquisitions (hereinafter M&A) as alternatives to internal expansion Being out of resources to continue enhancing the business interests or being on the brink of bankruptcy may be the reasons for closing the venture book of an enterprise M&A is an inevitable consequence of the economy and leads to the appearance of larger business entities In the positive point, a successful M&A transaction will enhance the business of both the buyers and the sellers by the synergic - the well-known 1+1 =3 M&A represent a major force in the modern financial and economic environment This is an area with potential for both good and harm1 In the globalization, M&A is an effective and efficient instrument for cross-border investment Obviously after Vietnam is an official member of WTO, M&A activities dramatically developed in Vietnam and became a large capital market This is the opportunities and challenges for Vietnamese enterprises to take advantages of the foreign resources, i.e capital, technology, experience in doing business, etc… and the State to control and administer related issues M&A activities may be considered from legal, financial or corporate governance aspects However, legal aspect is the most important aspect and dominates the others From the theory perspective, M&A is not still a new activity in Vietnam, but the legal framework on M&A exists some legislations compiled when the law-makers have not had a complete awareness about this phenomenon yet For instance, Laws on Enterprises and Laws on Investment were adapted in 2005, which sufficiently regulate M&A transactions have shown many conflicts and shortcomings in the implementation Besides that the legal framework is not identical and exists too many outdate provisions To prepare for an official economic market with strong flow of foreign direct investment, it is necessary to carry out a comprehensive review of legislations on M&A in which point out the shortcomings and the orientation to improvement From the practical perspective, the legal barrier is a substantial difficulty of investor in Vietnam M&A market2 The difficulty may arise from the unreality of provisions, the J Fried Weston, Kwan S Chung, Susan E Hoag (1990), Mergers, restructuring, and corporate control, Prentice-Hall, United Stated of America, p.xxv Available on http://baodautu.vn/thi-truong-ma-hoi-thuc-hoan-thien-khung-phap-ly.html, last visited at June 2014 confusing understanding of the State agencies, the lack of guidance, or the complication of legal system For the purposes of creating an appropriate legal framework that go along with a strong M&A market, it is necessary to have an overview of legal framework, assess the implementation and recommendations for supplementing and amending the legislations Regardless the previous reasons, the most important reason that M&A is a sector in which stroke and attracted me at the first sight Hence, the topic “Legislation on mergers and acquisitions – Legal framework and recommendations for improvement” is a proper chosen for my graduate thesis During the limited time, the author had tried the best to study as much as possible However, it is impossible to finish a perfect thesis Any comments and advices are always welcome to improve my work Literature review For the necessity, M&A also attracted the concerns of many authors before The legal researches on Vietnam legislations on M&A may be the overview of legal framework or arise from a certain aspects In Ho Chi Minh City University of Law, the most essential research may be the final report of scientific research of the Ministry level “Legislation regulating on mergers and acquisitions of enterprises in Vietnam” coordinated by Dr Pham Tri Hung, which covered the main aspects of legal framework on M&A The other researches may be regarded that: Master’s Thesis 2007 of Tran Thanh Tung “Acquisitions in accordance with current legal system”; Bachelor’s Thesis of Nguyen Hai Minh Thi (2008) “Selling of enterprises – theory and reality”; Bachelor’s thesis of Nguyen Thi My Dung (2009) “Acquisitions of enterprises – theory and reality”; Master’s Thesis of Dao Trong Nhan (2009); Master’s Thesis of Tran Van Khanh (2009) “ Mergers and acquisition – a comparision between Vietnamese legislation and Britain’s”; “M&A of enterprises in Vietnam legal system – the status and recommendations for improving”; Bachelor’s Thesis of Pham Van Anh (2010) “Acquisitions of enterprises – theory and the reality”; Master’s Thesis of Huynh Van Hieu “Economic concentration under acquisitions in accordance with Vietnamese Competition Law (2010); Bachelor’s Thesis of Le Ngoc Tram Anh (2012) “Acquisitions of enterprises – theory and the reality”; Bachelor’s Thesis of Nguyen Thi Vinh (2013) “Legislation on mergers and acquisitions – Shortcomings and recommendations” Meanwhile, the other researches such articles, discussions are also the meaningful works on legal framework on M&A Maybe regarding to some sufficient researches such: Pham Duy Nghia (2012) “Short criticism from corporate governance perspective”; Luu Minh Duc & Nguyen Dinh Cung (2010) “Mergers and acquisitions with respect to corporate governance perspective: theory, international experience and reality in Vietnam” in the Journal of Economic Management; Securities Commission (2003), scientific research of the Ministry level “State Management subjects to take over, consolidation on Vietnam securities market”; Vietnamese Competition Authority (2012) “Economic concentration report”; Nguyen Ngoc Son (2004) “Determining the relevant market according to Competition Law 2004” in Journal of Legislative Research In spirit of inheriting and absorbing the previous researches, the author proposed a more general study and deeper analyses on legal aspect of M&A sector This thesis will present the relationship between legislations on the implementation of a common M&A transaction At the end, the author will review the legal framework and recommend some issue that need to be improved Delimitation Legislation on M&A is a wide range with the distinct perspectives, in the delimitation of this thesis the author will focus on researching Vietnam legislation on M&A of enterprise with the following points: • Recognize M&A activities are the economic phenomenon under the scope of regulations of vary legislations • Recognize M&A activity as a direct investment forms in which an enterprise try to take over another The transactions in which an individual take over an enterprise not fall in the delimitation of the thesis • A transactions always have the buyer and the seller, • The selling enterprises only refer to LLC and JSC • M&A transactions will be carried out following some legal forms and strict procedures • Legal framework on M&A shall be construed from four aspects: the permission of State on implementation of transactions, valuation, contract, and procedures The review and recommendations also arise from the practical of Vietnam legislations and some foreign legislation Purposes Firstly, the thesis will give the understanding with legal aspect about M&A activities The reader will have a general overview about the scope of regulation of laws on M&A activity, including definitions, characteristics, legal forms, and legal outcomes Secondly, the legal framework on M&A of enterprise will be presented with respect to some typical matter that the parties may be concerned in process of M&A such the permission of State on implementation of transactions, valuation, contract, and procedures Correspondingly, the author will analyze the shortcomings in theory as well as practical of legislations Thirdly, the thesis will have a look over the M&A market and anticipate the orientation of development of M&A market with the dominating elements Last but not least, review the practical of legislations on M&A and contribute some recommendations for improvement Methodology For the purposes of thesis, the author the author will combine various kinds of legal methods as follows: • Description method is used mainly in Chapter I to present definitions, concepts and provisions of law • Analytical method is used in all chapters to analyze the provisions and reasons of this provision • Inductive method is used to withdraw the conclusions on each issue and the recommendations • Synthetic method is used to collect relevant information from different sources such as books, journal articles, cases, etc… and synthesise the result of analytical method to have a general picture of legislation • Comparative method is used to compare between, the current laws and the draft new laws, the Vietnamese laws and the foreign laws, the theory and the practical Moreover, the author carried out the research from the generalisation to the detail and from the theory to the practical Significance The thesis is one of reference resources, which is up to date the new effective legislations and the trend to improve and develop of legal framework, for anyone who desired to conduct M&A activities in Vietnam, especially foreign investors The thesis is also an overall picture about legislations on M&A, indicates what the parties shall and should in M&A process Besides, the thesis is also a codification of legislations on M&A in which indicated the confusing of the implementation of law in practical, the lack, and redundancy of legal system Moreover, it contributes some necessary recommendations which can be used for improving the legislation on M&A - - The equitization of SOEs pursuant to Decision No 929/QD-TTg of Prime Minister on approval of scheme "restructuring of state-owned enterprises, focusing on economic groups and state-owned corporations period 2011 2015" The restructuring in banking sectors The amendment and supplementations of legal framework on M&A, i.e Draft New Law on Enterprises and Draft New Law on Investment are gathering the feedbacks and will propose to National Assembly The report of AVM Vietnam Company forecast the scale of the total value of M&A transactions in the next period 2014 – 2018 would be up to 20 billion USD (the scale of period 2008 – 2013 is 15 billion USD) M&A activities will tend to occur in some business sectors such as banking, manufacturing consumer, real estate, information technology, transport – logistic…120 3.2 Review of legal framework on M&A Vietnam legal framework on M&A presented in chapter exposed to many shortcomings in theory as well as in practice The author hereby gerealize the shortcomings of legal framework on M&A in Vietnam Firstly, the lack of unification Vietnamese law contain enormous number of legal documents The scope of legislation is overlapping each other, no matter if the later legislations are compatible with the early legislations The excessively conspicuous examples are the distinct definitions of terms “merger”, “consolidation”, and “acquisition” in Law on Enterprises and Law on Competition “Foreign investors” is also a confusing terms, which is differently defined in Law on Enterprise 2005, Law on Investment 2005, Circular No 213/2012/TT-BTC, Decision No 55/2009/QD-TTg, and Decision No 88/2009/QD-TTg Many legislations conflict with each other, such as Decree 108/2006/ND-CP and Decree 102/2010/ND-CP The legal basis for M&A is up to hundred legislations, meanwhile they are reasonably to be codified The law is the harmonization system of regulations, an issue may be regulated by many provisions, but they must unify Secondly, lack of guidance Even though the number of legal documents is large and the content of it is redundant, gaps still exist in the current legal framework A law ratified is hard to thoroughly enforce implementation but need more guidance form resolutions, decrees, circulars, decisions, local regulations, after that The lack of legislations exists in most of sectors, particular in procedures The mentions may result from the lack of guidance on application of international treatment, e.g WTO commitments; valuation of enterprises; M&A contracts; … 120 Available on http://baodautu.vn/ma-tai-viet-nam-huong-toi-moc-20-ty-usd.html, last visited at July 2014 33 Thirdly, unclear and complicated procedures As analyzed about the ambiguity of Decree 108/2006/ND-CP and Decree 102/2010/ND-CP in section 2.4.1, the most unclear and complicated procedures almost always relate to foreign investors Besides, excessive number of lengthy procedures are being the burden of enterprises The unnecessary procedures need to be abolished to make up a broad legal corridor for the growth of M&A market Fourthly, unpractical provisions The orientation to the market economy in 2018 requires the liberalization in business and the equal advantages between economic sectors However, Vietnam still maintains too many restrictions to the investors Besides, the criteria to calculate market share is total unreality It is an impossible mission of enterprise in their own respective to determine the relevant market and calculate the market share For the aforementioned shortcomings, the amendment and supplementation of legislations should be oriented to: - - - Codify the legal framework on M&A of enterprise It is no need to supplement a concrete legislation on M&A, because M&A activities relate to many sectors In experience of countries, they are also has no common legislation for M&A activities121 The most significant mission of codification is to create a consistent and harmonic legal system on M&A Internalize the international practices The linking between Vietnamese laws and international practices shall promote the process of internationalization and the co-operation between foreign and Vietnamese investors Facilitate procedures and investment conditions to attract investors 3.3 Recommendations To enhance the effectiveness of M&A market, the legal framework on M&A must be improved at first The study herein contributes some concrete recommendations on amending and supplementing for the improvement of legislations 3.3.1 Unifying the definitions 3.3.1.1 Unifying the definitions of mergers, acquisitions and consolidations under Law on Enterprises and Law on Competition The terms of mergers, acquisitions, and consolidations are interpreted in Law on Enterprises and Law on Competition They are the foundation of legal framework on M&A Therefore, the most important task for the improvement is to unify these definitions 121 Available on http://daibieunhandan.vn/default.aspx?tabid=81&NewsId=94188, last visited at July 2014 34 Draft New Law on Enterprises 2014 approaches to mergers and consolidations similar to Law on Competition with proposal to abolish the criterion “the same type of company” The amendment is rational, because it will reduce expenses and time of enterprises since they not need to be coverted into another type On the other hand, Law on Competition needs to make clear the definition of acquisitions on the meaning of “assets” It should be provided in detail whether “assets” are the actual assets from accounting perspective or the capital shares/shareholdings or both of them; and for each case when the buyers may gain the right to control the sellers 3.3.1.2 Amending the definition of foreign investor Law on Investment 2005 defined the foreign investors are organizations, individuals using capital in order to carry out investment activities in Vietnam 122 Law on Enterprise 2005 also determines status of foreign investors based on nationality criterion; an enterprise is foreign investor if established in pursuant to foreign law123 However, Circular No 213/2012/TT-BTC, Decision No 55/2009/QD-TTg, Decision No 88/2009/QD-TTg referred foreign investor including enterprises established according to Vietnamese law and had the own of enterprises who established in pursuant to foreign law more than 49% Draft New Law on Investment 2014, in a more strict interpretation, proposed to stipulate the foreign investors includes124: (1) Foreigner; (2) Foreign enterprises; (3) Vietnamese enterprises have individuals, organizations provided in point (a) and (b) this clause hold from 50% of charter capital (have the voting right); LLCs or Partnerships have from 50% members who is individual organizations provided in point (a) and (b) this clause; (4) Vietnamese enterprises have individuals, organizations provided in point (a) and (b) this clause hold from 50% of charter capital (have the voting right) The purpose of the Draft New Law is to prevent foreign investor from trying to access some restrain market and this provision seems to be more efficient than ever 3.3.2 Enhance the market opening For the orientation to economic market, Vietnam should enhance the sector in which the foreign investors may invest, including uncommitted sectors in WTO commitments The holding ratio of foreign investors in commercial bank and public 122 Article 3.5, Law on Investment 2005 Article 4.2, Law on Enterprises 2005 124 Article 4.3, Draft New Law on Investment 2014 123 35 company should be increased The sectors in which the State holding more than 50% capital should be reduced to ensure the balance between economic sectors This recommendation should be implemented after several years even as the State has stabilized the macro economy 3.3.3 Criterion to determine the obligation of notification to Competition Administrative Body The enterprises involved economic concentrations have obliged to notify to Competition Administrative Body if the combined market share is more than 30% However, the calculation of market share is a complicated work even subject to the developed countries The enterprises may spend too much expense in this work so for reducing the burden, they may invoke an incorrect market share Balance the advantages and disadvantages of the market share criterion, the supervising systems of the economic concentration around the world almost use turnover as such a criterion instead of market share The advantages of turnover criterion are that: - Enterprises are easy to provide data; In accordance with international practices; and In case of necessary to assess the potential effect of concentration, the Administrative Competition Body may require the parties of concentration and the other enterprises doing business in the relevant market to provide more information It seem to be more reasonable when the Administrative Competition Body collect the market data125 The EC mergers regulation stipulated that concentrations with a Community dimension shall be notified to the Commission prior to their implementation 126 A concentration has a Community dimension where127: - The combined aggregate worldwide turnover of all the undertakings concerned is more than EUR 5000 million; and The aggregate Community-wide turnover of each of at least two of the undertakings concerned is more than EUR 250 million, unless each of the undertakings concerned achieves more than two-thirds of its aggregate Community-wide turnover within one and the same Member State The criterion should be used a definite turnover for determining the notified obligation of the enterprise in economic concentrations However, subject to each certain goods or 125 Vietnamese Competition Authority (2012), supra note 50 , p.145 Article 4.1, Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings 127 Article 1.2, Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings 126 36 service market, the market sizes are distinct Therefore, it should add some sub-criteria about turnover depend on characteristic of particular market 3.3.4 Supplementing regulations 3.3.3.1 Enacting guiding documents The lack of guidance will lead confusing interpretation and implementation As analysed, the State should enact legislations on: - Guiding the application of WTO commitment and the other treatments; Guiding the ratio of foreign investors in Vietnamese enterprises in uncommitted sector Guiding the ratio of foreign investors who not come from the members of WTO in Vietnamese enterprises Internalizing international valuation standards 3.3.3.2 Supplementing provisions on M&A contract Because of the particularity of subjects, M&A contract is a particular type of contract From both of theory and practical perspectives, it needs to supplement M&A contract as a type of contract with detail provisions on pre-contractual agreement, form of contract, payment methods, rights and obligations of parties, rights and obligations toward third parties, implementations of contract,… 3.3.5 Simplifying procedures Draft New Law on Investment 2014 proposes to abolish the procedures for registration of investment except for some sectors128 Subject to M&A activities, foreign investors not need to carry out procedures to be granted Investment Certificate The sellers will carry out the procedures pursuant to laws on enterprises and explain the satisfaction of investment conditions of foreign investors129 This is a considerable change of Laws on Investment to reduce the procedural burden for the enterprises Due to that, laws on enterprises shall be amended current procedures Procedures for transferring capital shares/shareholdings should be identically provided for both of internal and foreign investors Procedures should be dividend into two separate procedures: (i) procedures relating to adjust the Enterprise Registration Certificate, and (ii) procedures to adjust the Investment Certificate In addition, maybe abolishing procedures to adjust the Investment Certificate subject to the enterprises, which possessing both Enterprise Registration Certificate and Investment Certificate but not need to carry out procedures for registration of investment pursuant to Law on Investment 128 129 Article 43, Draft New Law on Investment 2014 Article 61, Draft New Law on Investment 2014 37 3.3.6 Codifying legislations A hundred legislation of legal framework on M&A of enterprise is in need to be revised, collected, and re-ordered There should be abolishing redundant and outdate provisions in some legislations and consolidating the legislations has the mutual scope The codification will be of much help the legal system to be more clarity, understandable and applicable Sub – conclusion An effective legal framework will facilitate and encourage investors to conduct investment, which lead to boost the power of market, as well as economy M&A market in Vietnam is young and growing and this is the time to enhance our legal system pursuant to the international commitments and orientation of the Government The previous recommendations are essential points in need for the improvement of legislations 38 CONCLUSION M&A is an economic phenomenon and a useful instrument for investment and reorganization of enterprises M&A activities just take shape and being evolution in Vietnam for a decade, it is anticipated a potential market in the future To encourage and enhance M&A market, an effective supervising mechanism is indeed necessary for Vietnam Vietnam legal framework on M&A of enterprise estimated has being progressed in the recent years However, legal framework seems to be out-dated and overloaded with the strong evolution of the market Acknowledge to the necessary of this matter so the author carried out a research in a short term to contribute to the improvement of law In the light of the previous researches, the legislations, the practice, and the understanding on this matter of economist, the author’s work got some achievements as which followings: Firstly, described general knowledge about M&A activities with respect to legal perspective Chapter answered these questions: how the M&A activities defined in the law? How to recognize whether a transaction is M&A transactions? What the certain transactions are regulated by law? What will come up with at the end of the transactions? Secondly, analyzed and synthesized the legislations in the adherence with the substantial issues of M&A transactions The thesis focused on these issues: the supervision of State to M&A transaction, valuation of enterprises, M&A contract, and the procedures to legalize all the agreements The legal framework mentioned to Civil Code, laws on enterprises, laws on investment, laws on competition, laws on securities, WTO’s commitments, legislations on valuation, legislations on SOEs, and other related legal documents Thirdly, briefed the status Vietnam market in the recent years and forecasted the orientation of market with the dominating elements from both of economic and legal aspects Fourthly, analyzed some shortcomings arise from the content of provision and the implementation of this provisions Finally, to conclude the thesis, the author made some sufficient recommendations, which are the result of the induction through the research The recommendations are seem to be the notable suggestions for the improvement of legal framework on M&A in the following years Inclusion, the thesis introduced the subjects of legislations on M&A, legal framework on M&A, some shortcomings, the review of legal framework in practice and recommendations for improvement During the study, the author was aware that the 39 mentioned aspect of legal framework on M&A and some other aspects such due diligence, tax, employment, intellectual property, etc… may be conducted to research in an independent topic in which indicate a deeper research to reach more comprehensive understanding on each issue 40 ANNEX Criteria, list of classification SOEs (Issued together with Decision No 37/2014/QD-TTg dated 18 June of the Prime Minister) I THE STATE SHALL HOLD 100% OF CHARTER CAPITAL OF THE ENTERPRISES ENGAGED IN: Fulfillment of National Defense and Security tasks as regulated of the Government Manufacturing and supplying industrial explosive materials Manufacturing and supplying toxic chemicals Transmitting, dispatching the national power system, multi-purpose hydropower and nuclear power particularly important to the economy and society associated with the National Defense and Security Managing, operating the infrastructure system of the national and the urban railway; controlling the national and the urban railway transportation Managing, operating airports playing an important role to National Defense and Security; flight assurance services Assurance of maritime safety Providing public postal services Lotteries 10 Publishing (excluding printing and publishing) 11 Printing money and casting coins 12 Map measurement serving National Defense and Security 13 Managing, operating the irrigation system, inter-provincial and inter-district agricultural hydraulic engineering and stone revetment 14 Planting and protecting watershed forest, protection forest, and specialized forest 15 Credit extension serving the economic and social development 16 The member enterprises that play an important role in business operation and strategy development, hold the secret of business and technological secrets, and of which 100% of capital must be held by state-owned Corporations to perform their tasks and the main business line II THE FOLLOWING ENTERPRISES SHALL BE EQUITIZED AND AT LEAST 75% TOTAL SHARES OF WHICH SHALL BE HELD BY THE STATE Managing, using and maintaining airports (excluding airports stated in Section I) Managing, operating national integrated seaports and international gateway Managing, maintaining the system of roads and inland waterways Maintaining the infrastructure system of the national railway Providing the telecommunication infrastructure Extraction of minerals on a large scale Extraction of petroleum and natural gas III THE FOLLOWING ENTERPRISES SHALL BE EQUITIZED AND 65% TO ABOVE 75% OF THE TOTAL SHARES OF WHICH SHALL BE HELD BY THE STATE Processing petroleum and natural gas Producing cigarette The enterprises satisfying the essential requirements for development of production and raising the living standards of ethnic peoples in mountainous, remote and isolated areas Planting and processing rubber and coffee; planting and managing forests in strategic areas, mountainous, remote and isolated areas associated with National Defense and Security The enterprises with the role of assuring major economic balancing and stable market operating in the following industries and sectors: a) Wholesaling of preventive and treating medicines; b) Wholesaling of foods; c) Wholesaling of gasoline Finance and Banking (excluding insurance, securities, asset management companies, and financial leasing companies) Air transportation Distribution of electricity IV THE FOLLOWING ENTERPRISES SHALL BE EQUITIZED AND ABOVE 50% TO BELOW 65% OF THE TOTAL SHARES OF WHICH SHALL BE HELD BY THE STATE Urban water drainage Environmental sanitation Urban lighting Manufacturing and supplying urban clean water Fundamental investigation into geology and hydrography and meteorology; exploration of, survey, investigation into the land resources, water resources, mineral resources and other types of natural resources Manufacturing and storing seeds and animal sperm; manufacturing biomedical vaccines and veterinary vaccines Manufacturing the basic chemicals, chemical fertilizers and plant protection drugs Planting, processing rubber and coffee; planting and managing the forests in the areas not mentioned in section III International sea transportation and railway transportation BIBLIOGRAPHY I NATIONAL LAWS AND OTHER DOCUMENTS Vietnamese Civil Code 2005 Law on Bankruptcy 2014 Law on Investment 2005 Law on Commercial Arbitration 2010 Law on Competition 2004 Law on Enterprises 2005 Law on Prices 2012 Law on Securities 2010 Ordinance No 63/2013/UBTVQH13 10 Decree 43/2010/ND-CP 11 Decree No 222/2013/ND-CP 12 Decree 58/2012/ND-CP 13 Decree No 116/2005/ND-CP 14 Decree 01/2014/ND-CP 15 Decree 59/2011/ND-CP 16 Decree 102/2010/ND-CP 17 Decree 108/2006/ND-CP 18 Decree No 90/2011/ND-CP 19 Circular No 202/2011/TT-BTC 20 Decision 55/2009/QD-TTg 21 Decision No 88/2009/QD-TTg 22 Dispatch No 7836/BKH-TCT 21 Schedule of Specific Commitments in Services (2006) 22 Draft New Law on Enterprises 2014 23 Draft New Law on Investment 2014 English Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings UK Company Act 2006 II RESEARCHES Le Ngoc Tram Anh (2012) “Acquisitions of enterprises – theory and the reality”, Bachelor’s Thesis Pham Tri Hung (Coordinator) (2010), Legislation regulating on mergers and acquisitions of enterprises in Vietnam, Final report of scientific research of the Ministry level Securities Commission (2003), State Management subjects to take over, consolidation on Vietnam securities market, scientific research of the Ministry level Tran Thanh Tung (2007), “Acquisitions in accordance with current legal system”, Master’s Thesis Vuong Dinh Hue (2011), Crucial solutions to restructure SOEs, discussion in Restructure Economy Conference dated 16/12/2011 III BOOKS Vietnamese Ho Chi Minh University of Law, Business entity textbook Ho Chi Minh City University of Law, Laws on contract and compensating for damage outside contract texbook, internal material Vietnamese Competition Authority (2012), Economic concentration report English Black’s law dictionary 9th ed (2009) Donald DePamphilis (2011), Mergers and Acquisition basics- All you need to know, Elsevier Inc., United Kingdom J Fried Weston, Kwan S Chung, Susan E Hoag (1990), Mergers, restructuring, and corporate control, Prentice-Hall, US Michael E S Frankel (2005), Mergers and Acquisitions Basics, Iohn Wiley and Sons Sherman, Andrew J (2011), Mergers and acquisitions from A to Z, American Management Association, US IV JOURNALS Ha Thi Thanh Binh (2009), Internalizing of Viet Nam’s WTO Commitments in Services, Journal of Legislative Research (5(142)) Luu Minh Duc & Nguyen Dinh Cung (2010), Mergers and acquisitions with respect to corporate governance perspective: theory, international experience and reality in Vietnam, the Journal of Economic Managemant Nguyen Ngoc Son (2004), Determining the relevant market according to Competition Law 2004, Journal of Legislative Research, (11(63)), p.25-31 Pham Duy Nghia (2010), “Legislations on acquisition of enterprises: Short criticism from corporate governance perspective”, Journal of Legislative Research, (10(171)), p.46-49, p 48 V WEBSITES http://baodautu.vn/ma-het-thoi-an-xoi-o-thi.html http://baodautu.vn/ma-tai-viet-nam-huong-toi-moc-20-ty-usd.html http://cafef.vn/thi-truong-chung-khoan/thanh-toan-ma-tien-mat-hay-co-phieu20110330025054291ca31.chn 4.http://chinhphu.vn/portal/page/portal/chinhphu/noidungtinhhinhthuchien?categoryId =100003029&articleId=10053403 http://daibieunhandan.vn/default.aspx?tabid=81&NewsId=94188 http://dddn.com.vn/dau-tu/khi-chinh-sach-vong-quanh-2013121003023893.htm http://dddn.com.vn/phap-luat/vong-vo-thu-tuc-gop-von-mua-co-phan2011050610136950.htm 8.http://dangcongsan.vn/cpv/Modules/News/NewsDetail.aspx?co_id=30110&cn_id=65 6748 http://www.massogroup.com/knowledge/insights/8305-dinh-gia-thuong-hieu-va-taisan-vo-hinh-trong-m-a.html 10 http://www.investopedia.com/terms/c/control.asp 11.http://www.lienvietpostbank.com.vn/tin-tuc-su-kien/tin-lienvietpostbank/noidung/du-bao-kinh-te-nam-2014-va-nhung-bai-hoc-phat-trien-doanh-nghiep 12.http://www.tapchitaichinh.vn/Thong-tin-doanh-nghiep/MA-5-nam-cho-mot-thitruong-5-ty-USD/28576.tctc 13.http://vietnamnet.vn/vn/kinh-te/154869/cac-thuong-vu-m-a-dinh-dam-nam2013.html 14 http://baodautu.vn/thi-truong-ma-hoi-thuc-hoan-thien-khung-phap-ly.html ... definitions 3.3.1.1 Unifying the definitions of mergers, acquisitions and consolidations under Law on Enterprises and Law on Competition The terms of mergers, acquisitions, and consolidations are... of the target company; procedures and conditions to M&A; employment plan; procedures of and perquisite conditions for conversation of assets and for conversation of capital shares, shares, bonds... Anh (2012) ? ?Acquisitions of enterprises – theory and the reality”; Bachelor’s Thesis of Nguyen Thi Vinh (2013) ? ?Legislation on mergers and acquisitions – Shortcomings and recommendations? ?? Meanwhile,