MA a case study in viet nam banking system,

STATE BANK OF VIETNAM BANKING ACADEMY Foreign Language Faculty - - GRADUATION THESIS M&A – A CASE STUDY IN VIETNAM BANKING SYSTEM Lecturer Student Class Student Code : Tran Thi Hai Ly (M.A) : Tran Thi Bich Ngoc : K14-ATCD : 14A7510172 20th May 2015 Banking academy of Vietnam Graduation thesis ABSTRACT M&A has become an inevitable trend all over the world A big company which desires to become the number one service supplier can acquire other rivals in the market by purchasing their shares, or a weak firm can accept to be merged with another stronger company to survive itself The fact is that the M&A activities are happening much more actively and will rapidly widespread all over the world And Vietnam is not an exception when there were many M&A transactions being conducted recently, especially in banking sector; however, M&A activity in this sector itself contains several weaknesses and risks This study presents a deeper understanding regarding M&A activity in Vietnam banking system as well as its achievements, weaknesses and solutions for improvement In the study, the researcher uses the quantitative research method and qualitative research method The study reveals the real situations of M&A activity in Vietnam banking system from which Vietnam’s government and domestic banks could be aware so as to better manage and conduct this activity efficiently The researcher also proposes several recommendations to improve the efficiency of M&A in banking sector in Vietnam Tran Thi Bich Ngoc i ATCD-K14 Banking academy of Vietnam Graduation thesis ACKNOWLEDGEMENT I would like to express my deepest gratitude to all people who have helped me to conduct this research, either directly or indirectly contributed Special thanks to the Language Faculty for bringing me a chance to study in such a professional academic environment, which for sure opens up the world of opportunity for my future career path I am particularly grateful to my supervisor – Mrs Tran Thi Hai Ly(MA) of the Foreign Language Faculty - Banking Academy for her enthusiastic guidance and support that inspired me a great deal during I prepared this thesis.With her support and encouragement during the research period, I did improve the research quality and consistency Finally, my particular thanks go to my family, friends and colleagues who encouraged and helped me throughout the period of writing this thesis Tran Thi Bich Ngoc Tran Thi Bich Ngoc ii ATCD-K14 Banking academy of Vietnam Graduation thesis LIST OF TABLES AND FIGURES Figures/ Tables Title Page Table The world’s largest M&A deals in banking sector in period 1998-2007 12 Table Table The number and value of M&A deals in Vietnam from 2005 to 07/2009 Some M&A transactions between rural banks and large urban banks in Vietnam in the period of 1999 – 2004 14 18 Table M&A deals between domestic banks and foreign investors 20 Table Some M&A deals between domestic banks from 2005 to 2008 25 The percentage of M&A transactions in key industries in Vietnam (2007-2008) Figure Figure The number and value of M&A in 14 countries in the region Tran Thi Bich Ngoc iii 15 16 ATCD-K14 Banking academy of Vietnam Graduation thesis LIST OF ABBREVIATIONS Abbreviation Meaning BIDV Bank for Investment and Development of Vietnam VIB Vietnam International Bank HSBC the Hongkong and Shanghai Banking Corporation ABBank An Binh Bank VPBank Vietnam Prosperity Bank OCB Orient Commercial Bank BNP Paribas Banque Nationale de Paris Paribas (Paribas; Bank of Paris and the Netherlands) OCBC Oversea-Chinese Banking Corporation PNB Punjab National Bank ANZ Australia and NewZealand IFC International FinanceCorporation ACB Asia Commercial Bank SBV State Bank of Vietnam UOB United Overseas Bank Tran Thi Bich Ngoc iv ATCD-K14 Banking academy of Vietnam Graduation thesis TABLE OF CONTENT ABSTRACT I ACKNOWLEDGEMENT II LIST OF TABLES AND FIGURES III LIST OF ABBREVIATIONS IV TABLE OF CONTENT V CHAPTER INTRODUCTION 1.1 RATIONALE 1.2 RESEARCH OBJECTIVES 1.3 RESEARCH QUESTIONS 1.4 RESEARCH METHODOLOGY 1.5 RESEARCH SCOPE 1.6 RESEARCH STRUCTURE CHAPTER THEORETICAL BACKGROUND OF M&A ACTIVITY 2.1 MERGER AND ACQUISITION DEFINITION 2.1.1 Definition of merger and acquisition 2.1.2 Distinguish between mergers and acquisitions 2.2 CLASSIFICATION 2.1.1 According to the company’s integration 2.1.2 According to geographical parameter 2.1.3 According to the management's attitude 2.3 MOTIVES FOR M&A 2.4 M&A PROCESS 2.5 M&A IN THE WORLD 10 2.6 CONCLUSION 13 CHAPTER 3: THE ACTUAL SITUATIONS OF M&A ACTIVITY IN VIETNAM BANKING SYSTEM 14 3.1 GENERAL PERFORMANCES OF M&A IN VIETNAM 14 3.2 REAL SITUATIONS OF M&A ACTIVITIES IN BANKING SYSTEM IN VIETNAM 17 3.2.1 From 1997 to 2005 17 Tran Thi Bich Ngoc v ATCD-K14 Banking academy of Vietnam Graduation thesis 3.2.2 From 2005 up to now 18 3.3 EVALUATION 24 3.3.1 Achievements 24 3.3.2 Weaknesses & causes 26 3.4 CONCLUSION 27 CHAPTER 29 RECOMMENDATIONS TO IMPROVE THE FFECTIVENESS OF M&A ACTIVITIES IN VIETNAM BANKING SYSTEM 29 4.1 RECOMMENDATIONS FOR THE STATE AND MANAGEMENT AGENCIES 29 4.1.1 Completing the legal framework for M&A 29 4.1.2 Appointing a specific management agency 32 4.1.3 Increasing the transparency and publicity of the information 32 4.1.4 Supporting M&A consulting firms 33 4.1.5 Focusing on the training of human resources for M&A market 33 4.2 RECOMMENDATIONS FOR THE BANKS 34 4.2.1 Develop a clear and effective strategy of M&A 34 4.2.2 Taking appropriate evaluations 36 4.2.3 Improving human resources 37 4.3 RECOMMENDAIONS FOR FURTHER STUDY 38 4.4 CONCLUSION 38 CHAPTER V 39 CONCLUSION 39 REFERENCES 41 APPENDIX: STATEMENT OF ORIGINIALITY AND AUTHENTICITY 42 Tran Thi Bich Ngoc vi ATCD-K14 Banking academy of Vietnam Graduation thesis CHAPTER INTRODUCTION 1.1 RATIONALE In recent years, Vietnam's economy has made significant progress, and the growth rate of GDP has remained high and stable at between 7% and 8.5% from 2000 to 2007 In addition, Vietnam has experienced a lot of merits from becoming an official member of the World Trade Organization (WTO) in November 2006 Integration and globalization open up many opportunities to Vietnamese enterprises, however, this new trend has put Vietnamese businesses under strong pressure caused by fierce competition with foreign companies in both national and international markets Therefore, enterprises need to enhance competitive advantage and develop or expand the scale to survive by transferring new scientific technology, adopting management skills, attracting more funds, and penetrating global market Enterprises can choose several paths, including M&A, which can create large entities to be able to compete for seeking out growth and profits The merger and acquisition (M&A) activities have emerged very early and spread rapidly around the world over the last two decades with the amount and volume reaching record highs However, in Vietnam this activity is still primitive and lacks legal guiding documents from the state, and big business deals are mostly the combinations of firms in the fields of securities, insurance, financial, banking and services According to the experts, the wave of merger and acquisition in financial market will take place faster than previous and become more active in banking and securities sectors However, M&A activity in this sector itself contains several weaknesses and problems, which challenge both lawmakers and participants involved in M&A process This question has important implications to business practices, which encourages me to choose the topic “M&A- a case study in Vietnam banking system” as the final thesis to graduate from Banking Academy Tran Thi Bich Ngoc ATCD-K14 Banking academy of Vietnam 1.2 Graduation thesis RESEARCH OBJECTIVES To solve the above problem, the researcher will focus on analyzing and evaluating the current situations of M&A activities in Vietnam banking system to identify the achievements, weaknesses and problems of M&A activity in Vietnam baking system and then propose recommendations to improve M&A process 1.3 RESEARCH QUESTIONS In order to achieve the objectives, the research is conducted to answer the following questions: ● What are the current situations of M&A activities in Vietnam banking system? ● What are the achievements of M&A activities in Vietnam baking system? ● What are the weakness and problems of M&A activities in Vietnam baking system? ● How to improve the effectiveness of M&A activities in Vietnam baking system? 1.4 RESEARCH METHODOLOGY The thesis cannot be conducted without reliable sources of information; thus, collecting data become the top-important to decide the success of the thesis That’s why in this thesis, the author used several types of information including books, newspapers, reports and internet searching In addition, some relevant studies will be reviewed to see what other Vietnamese and foreign researchers have reported regarding the M&A activities in Vietnam baking system Tran Thi Bich Ngoc ATCD-K14 Banking academy of Vietnam 1.5 Graduation thesis RESEARCH SCOPE ● The research focuses on M&A activity in Vietnam banking system from 1987 to now ● Research is conducted in Hanoi ● Timing 1.6 - Secondary data: For the period from 2014 to early 2015 - Primary data: For the period from 2014 to early 2015 RESEARCH STRUCTURE Chapter 1: Introduction Chapter 2: Theoretical background on M&A Chapter 3: The actual situations of M&A in Vietnam banking system Chapter 4: Recommendations to improve the effectiveness of M&A activity in Vietnam banking system Tran Thi Bich Ngoc ATCD-K14 Banking academy of Vietnam Graduation thesis strengthen their financial resources and improve their competitiveness, but actually the participants of the M&A including buyers, sellers, intermediary organizations, legal authorities, etc.have not taken synchronized movements with M&A process and integration trend yet Although we cannot deny the benefits brought recently by M&A activities, it is the fact this activity in Vietnam remains many difficulties and shortcomings Only when recognizing these challenges, we can devise appropriate solutions to develop M&A market in Vietnam, help domestic enterprises to easily conduct their strategic goals, strengthen their position in the domestic market, in the region and in the world Tran Thi Bich Ngoc 28 ATCD-K14 Banking academy of Vietnam Graduation thesis CHAPTER RECOMMENDATIONS TO IMPROVE THE FFECTIVENESS OF M&A ACTIVITIES IN VIETNAM BANKING SYSTEM After going through all the contents of M&A activity and examine several real situations of M&A in Vietnam banking system, we can evaluate the achievements and weaknesses brought by M&A transactions In this chapter, researcher will propose a number of remedial actions for both the management agencies and domestic banks themselves to gradually improve the efficiency of M&A activity in banking sector 4.1 RECOMMENDATIONS FOR THE STATE AND MANAGEMENT AGENCIES Vietnam has a large number of banks, in which mostly are small, meanwhile, in every economy, a strong banking system is built by a few banks, butoperating in a large scale and holding strong financial resources Therefore, Vietnam should encourage these small banks to form a bigger one to increase the competitiveness and expand the whole economic scale However, the State should let the market motivations boost them to actively seek the other, instead of obliging their engagement The State should only intervene to accelerate this process by shaping a favorable environment for merging banks and ensure the stable and safe development In order to reach these targets, the State should come up with several possible solutions as follow: 4.1.1 Completing the legal framework for M&A Currently, the actual legal documents to regulate the M&A activities in Vietnam are very few, in which most are general and vague, therefore, in order to develop the M&A market, the State needs to implement clear directions to help enterprises conduct M&A transactions successfully Tran Thi Bich Ngoc 29 ATCD-K14 Banking academy of Vietnam Graduation thesis Firstly, M&A is a commercial transaction requiring specific regulations which guide the necessary legal procedures to conduct this transaction, whereas, the legal regulations related to M&A activities in Vietnam are defined in several documents but those provisions are still scattered in some laws, decrees, circulars or commitments which stop at the establishment on a form of M&A, and only solve the problem “rename and change their form” Besides, the form of M&A in Vietnam is quite simple, typically the new CompetitionAct only provides the regulation on horizontal merger,therefore, it must continue to complete the regulations for other types of merger to enrich the supply for M&A market Stemming from these drawbacks, a separate adjustment law for M&A activities in Vietnam should be implemented Secondly, M&A transactions in Vietnam, especially in banking and financial sector are largely involved by foreign institutions and enterprises Therefore, the legal documents regulating the merger and acquisition now need to contain provisions for transactions with foreign elements In particular, the State should specify the criteria to determine a foreign investor, expand the foreign investment rate, and complete the regulations on financial capability, business status, and legal issuesof the foreign investors Thirdly, a M&A deal also requires the involvement of many participants such as brokers, financial experts, accountant, auditor, and consultantsand their roles in a M&A transaction are very important, so they need to have adequate professional qualification and experience Irresponsibility of the consultants for businesses could lead to several serious consequences, therefore, the rules on responsibilities, rights and obligations of these objects in M&A are needed to ensure the safety for participating enterprises in this type of transaction In addition, the most concerning issue of the State is try to control and limit the negative impacts of M&A activities, to be more specific, that is monopoly which Tran Thi Bich Ngoc 30 ATCD-K14 Banking academy of Vietnam Graduation thesis a M&A deal can bring The determination of market share after the purchase can be estimated by several ways which lead to different results Therefore, the State must apply a specific calculation to prevent banks from abusing this case to cause monopoly Besides, the competition management agencies can impose a value to control economic concentration, and assist management agencies to control this problem and any big deals easier The law should also provide rulesto limit the valueof transactions for deciding management responsibilities between the Department ofCompetition Administration and management agencies The responsibility of the Department of Competition Administration for managing M&A transactions may include: - Require businesses participating in M&A activity to notice the plan of conducting M&A deal and agreement between the parties - Support for M&A process if the transaction does not cause any negative effects on the market or dismiss impossible transactions and must explain the reasons - Inspect the transaction after licensing and check the procedures for conducting the transaction - Specify clearly the time to report to the authorities The State should also specify the M&A transactions prohibited in legislation, for example, the market share after the combination accounting for more than 50% of the related market shareis not allowed In particular, the prevention of the takeover of large financial conglomerates to the Vietnamese commercial banks needs to receive many special concerns In summary, the laws and regulations for M&A activity should be implemented toward supporting for the development of M&A market, promote the benefits and reduce the negative impacts brought by M&A transactions At the same Tran Thi Bich Ngoc 31 ATCD-K14 Banking academy of Vietnam Graduation thesis time, the legal framework for M&A must have long-term vision, avoid duplication and comply with international practices Regarding to banking and financial sector, the State should finish guiding circulars first, and then conduct researches , supplement and develop them into a private law for M&A activities of financial institutions because this activity is very complex, especially for banking and financial sector, a service industry with unique characteristics 4.1.2 Appointing a specific management agency There is no agency who is responsible for guiding and adjusting M&A deals, therefore, the involved participants find it difficult to understand thoroughly the process and legal problems of M&A until they waste a lot of time going to many organizations to apply for a license As a result, a management agency should be specified to take responsible for controlling, approving and checking the records of M&A deals 4.1.3 Increasing the transparency and publicity of the information In a M&A transaction, the information about the price, brand, market segment and administration is very important and necessary for both buyer and seller If the information is not controlled for transparency, it may cause several damages to both participants Like other markets, M&A market has chain effect, if a large M&A deal takes place without success or bears deception factors, it would cause major consequences to the whole economy Therefore, the authorities should implement written documents about information disclosure of all types of businesses in the economy, not just public joint stock companies and listed companies They also need to clarify the types of information that an enterprise must have obligation to provide timely and adequately for market management agencies Tran Thi Bich Ngoc 32 ATCD-K14 Banking academy of Vietnam Graduation thesis Thus, trading partners in M&A activity may get access to the trustful information from two main sources: business partners and the administrators With this method, the needed information for participants in M&A deals will be provided fully, accurately and timely, and the authorities can take control of the objects and their purpose of seeking for this information 4.1.4 Supporting M&A consulting firms An M&A transaction is based on the principle of the consensus of both partners with the help of a consulting firm, therefore, the sustainability of M&A market depends on the professionalism of consulting firms in this field Meanwhile, the capacity and scopeof operation of M&A consulting firms in Vietnam are still limited Bythis reason, the State should support and promote the activities of these intermediary organizations and establish reputed intermediary institutions specializing in conducting M&A deals to minimize the risks for businesses The specific solutions of government to encourage the growth of professional M&A consulting companies may be: - Promulgate the standards that a M&A consulting organization must have, including the financial capacity, qualification, experience of the managers and their employees In addition, the State should review the weak consulting firms and encourage them to invest in developing their own organization, otherwise require to cease their operation - Implement tax incentives in the early years of operation of a newborn consulting company - Facilitate and quickly license to the companies (including foreign organizations), if eligible 4.1.5 Focusing on the training of human resources for M&A market The success of a M&A deal is the result of the cooperation of the participants involved in this process, namely: buyer, seller, broker, and consultants with Tran Thi Bich Ngoc 33 ATCD-K14 Banking academy of Vietnam Graduation thesis extensive experience in various fields such as law, finance, brand and especially M&A knowledge, along with the support of the legal framework, policies and regulations related to M&A activity in the host country Therefore, the human resources owing deep knowledge about M&A and related issues are integral to the seller, buyer, consulting firms, brokerage firms and legislature As a result, we need to plan M&A training programs to have professional human resources for Vietnam M&A market The ministry of Education and Training may allow some universities to set up specialized training programme on M&A At the first step, they may hire foreign experts for teachingand give our professionals and lawmakers a chance to study abroad, where M&A market has developed strongly However, the quantity of the human resources need to be controlled to avoid "excess supply but deficient demand" as general human resources status in Vietnam recent years 4.2 RECOMMENDATIONS FOR THE BANKS As above mentioned, an M&A success needs to be contributed by many factors, in which along with the active support from the State and the Administration, the member banks (buyer and seller) must develop their internal resources to conduct proper and effective actions in every stage of the M&A process and even after the completion of this process - this is also the solution for them to be able to achieve business success 4.2.1 Develop a clear and effective strategy of M&A The problem of identifying the target bank is not easy in all cases, especially for buyers The essence of this is obtaining accurate information about the target bank to avoid mistakenly buy “counterfeit” There are many ways to approach and have information such as hiring a consulting firm or an auditing company, considering the entire business results, methods of management, technology and Tran Thi Bich Ngoc 34 ATCD-K14 Banking academy of Vietnam Graduation thesis human resources of the target bank Once the buyer already selects the partnership, the two parties will come together for an agreement and share the work The most concerning problem that the two sides should deal first is identifying which type of M&A transaction will be carried out, the law adjusting this transaction, the mechanism and procedure of this deal They should set out the content of the issues to be discussed in negotiation phase to proactively find out the solutions because many problems hindering the success of an M&A transaction can be predicted The content in negotiation should be arranged appropriately because it also affects the success of the deal The issues related to the rights and obligations of the two parties are also very important contents and need to be discussed thoroughly in the first days of negotiation The result of the negotiation process will affect the future operation of both sides, therefore, extreme caution is a mandatory principle for those who are responsible for doing this task Therefore, the member banks should select carefully those responsible for conducting the transaction, in specific, they have to be good employees, welltrained and have adequate experience in the negotiation process Besides, both banks should be straightforward and definitive to clarify their goals through negotiation This would make the M&A activity take place in friendly and comfortable atmosphere and easy to reach success And the result of the preparation, selection and negotiation are to make an agreement or an M&A contract Therefore, the content of this contract should reflect fully and accurately the results of the previous work, along with the desires and expectations of both sides because they are the basis for the two banks to set the terms and the commitments among them and with the authorities To be more specific, the contents of an M&A contract must be drafted clearly and cover all the issues including: the status of buyer and seller, object of the purchase, the sale price, time of transfer, any measures to ensure the contract, the characteristics of the demands and benefits, the specific bindings between the two sides and finally the agreement on the "post-M&A deal” If the M&A Tran Thi Bich Ngoc 35 ATCD-K14 Banking academy of Vietnam Graduation thesis contract only stops at the basic content, it will lead to internal contradictions right after the M&A deal Finally, in order to get a successful deal, minimize the risks and meet the requirements and desires of both banks, they should communicate with professional consulting firms in the field of M&A to use their services, and it will become an inevitable trend of this activity in the future 4.2.2 Taking appropriate evaluations The evaluation of the enterprise is one of the most important steps in M&A process because the buyer must use it to see the potential factors from their target bank to create added value in the future In order to so, the purchaser must perform a detailed investigation (Due Diligence); and the most important thing is conducting a legal evaluation and financial evaluation The aim of banks' legal evaluation is to assist the buyers in understanding their legal statuses, rights and obligations, legal regulations concerning manifold properties, contracts with workers, etc to identify the situation and legal risks so as to make buying decisions properly Legal assessment is generally carried out by attorneys representing buyers As a result, an M&A consulting attorney plays an integral role, and the conclusion regarding legal documents of an acquired or merged firm is the basis for two parties to make decisions in terms of whether they decide to purchase or merge with the firm or not Financial evaluation is typically done by auditing agencies or independent auditors Theoretically speaking, two parties in an M&A transaction usually pursue dissimilar economic purposes and this could affect whether to raise or to lower the price of business Buyers want to purchase at a low price while sellers want the opposite, therefore they might hide their problems or financial risks As a consequence, in an M&A transaction, the role of auditors is extremely vital in Tran Thi Bich Ngoc 36 ATCD-K14 Banking academy of Vietnam Graduation thesis assessing and drawing conclusion regarding the real value of the firm (tangible assets) and help connect two parties’ purposes In this case, buyers need to evaluate the capital structure, revenue, market shares, target customers, etc of the target bank 4.2.3 Improving human resources As mentioned above, human resources is the key element which determines the success of one business, especially in such new and complex M&A activities recently.However it is the fact that many issues caused by the lack of knowledge and experience of human resources have left M&A dealers big losses and even led them to the bankruptcy Therefore, this problem becomes a challenge to both domestic banks and the management authorities and needs to be solved urgently In order to improve this situation, domestic banks should design intensive training programs about M&A for their staff If possible, they can also give their staff a chance to study abroad in those countries which have a developed economy and M&A activities Moreover, domestic banks should build a close relationship with other foreign banks to have their support in this new trend and actively attend the staff exchange program with these banks to learn experience from them In addition, hiring experts in M&A activities is a wise solution to improve the result of the deal and gradually enhance the quality of the staff although it will be costly Those experts can give banks valuable advice about M&A deals and bank’s staff can have a good opportunity to enhance their knowledge and skills through working with experienced experts Domestic banks should also encourage the intrinsic value of their staff by giving them a chance to work in group and feel free to share their ideas because this way can help them to be more productive and effective in their jobs, especially utilize their creativity to improve the efficiency of banking system Tran Thi Bich Ngoc 37 ATCD-K14 Banking academy of Vietnam 4.3 Graduation thesis RECOMMENDAIONS FOR FURTHER STUDY M&A activity in Vietnam banking system has posed numerous difficulties to the parties involved In this research, the author focuses on real situations of M&A in banking sector in Vietnam to identify the achievements and weaknesses and indicate the recommendations Nevertheless, as there have been a number of complex issues that arise from M&A activities in banking sector, domestic banks face many challenges to avoid those troubles However, owing to the shortage of statistical data and limited scope, the author is not able to exploit deeper into this topic, especially the further challenges of M&A in banking system As a consequence, the author recommends further research in the weaknesses and solutions for M&A activity in banking sector in the future so that readers could have a clearer picture of real situations of M&A in Vietnam banking system and suggestions for its development 4.4 CONCLUSION Vietnam has several potential factors such as human resources, investment environment, the science and technology development, therefore, M&A can be expected to experience miraculous development in the future Moreover, enterprises operating in this sector in Vietnam will have great opportunity to improve and gradually complete their working system and expand even beyond national borders On this basis, the author has worked out a system of strategic solutions as well as clear directions proposed at the micro and macro-level with the aim of completing this model, creating favorable conditions for the development of banking sector in Vietnam in the future The solutions proposed by the author can be applied not only in the field of banking mergers and acquisitions but also in other sectors Tran Thi Bich Ngoc 38 ATCD-K14 Banking academy of Vietnam Graduation thesis CHAPTER V CONCLUSION In any circumstances, M&A activity plays a very important role in all the market economy, and Vietnam is not an exception If an M&A deal is conducted in the right way, it will bring several benefits to not only the buyer, seller, but also the consumers and our government But there are still some deals that may leave serious consequences for the whole business and economy However, M&A has become a prevalent trend is in the world and in all fields, especially in those areas which have high dominant financial sectors Therefore, Vietnam's commercial banks should not fear or avoid; conversely, they should enhance their knowledge of M&A activity and its pros and cons to have a positive attitude and actively integrate in this wave This study is aimed at analyzing the real situations of M&A in Vietnam banking system to find out the achievements and weaknesses, and then indicate the solutions for further improvement and development The theoretical background of the study is presented in the second chapter, in which the author gives the definition, then distinguishes between two terms “merger” and “acquisition” This chapter also provides information about the classification, motives and process of M&A transactions In this chapter, we have also gone through the history of M&A in the world with several transactions presented The third chapter draws a clear picture of M&A activity in banking sector in Vietnam, therefore, gives a deeper insight into the real situations of M&A in Vietnam banking system Then the author gives the evaluation through conducted M&A transactions including their achievements and weaknesses Tran Thi Bich Ngoc 39 ATCD-K14 Banking academy of Vietnam Graduation thesis The fourth chapter offers several recommendations for both Vietnamese government and domestic banks to improve the results of M&A transaction in the future The State should firstly complete the legal framework for M&A, secondly appoint a specific management agency to adjust M&A transactions, then increase the transparency and publicity of the information, support for M&A consulting firms, and finally focus on the training of human resources for M&A market For domestic banks, they should try to develop a clear and effective strategy of M&A, take appropriate evaluations before a deal, then improve human resources for long term development In conclusion, commercial banks in Vietnam must be "wise" in every single step of M&A process, and use their own efforts and the support from the attorney offices,consulting companies, or expertsin order to achieve the desired benefits instead of a costly failure or even a collapse and bankruptcy Tran Thi Bich Ngoc 40 ATCD-K14 Banking academy of Vietnam Graduation thesis LIST OF REFERENCES Patrick A.Gaughan (2005), Merger: what can go wrong and how to prevent it Reed, Standley Foster & Lajoux, The Art of Mergers and Acquisitions:AMerger and Acquisition Buyout Guide, Alexandra Reed PricewaterhouseCoopers,Asia-Pacific M&A Bulletin Mid-Year 2007 Prof Ian H Giddy, New York University, Methods of Corporate Valuation Henrikke Haaland, “The New Energy Game Changer” Mergers and Acquisition Strategies in the Oil and Gas Industry Yana Ponomarova, M&A: Divided we stand, united we fall? Case of emerging European www.banker.thomsonib.com ww.sbv.gov.vn www.luatvietnam.com.vn 10 www.saga.vn 11 www.vietnamnet.vn 12 www.pwc.com Tran Thi Bich Ngoc 41 ATCD-K14 Banking academy of Vietnam Graduation thesis APPENDIX BANKING ACADEMY FACULTY OF FOREIGN LANGUAGE Graduation Paper Statement of Originality and Authenticity This thesis is an original and authentic piece of work of myself I have fully acknowledged and referenced all material from secondary sources It has not, in whole or part, been presented elsewhere for assessment I have read the Examination Regulations and I am aware of the potential consequences of any breach of them Signature: Name: Date: Tran Thi Bich Ngoc 42 ATCD-K14