LV Thạc sỹ_Strategic buyer selection ofBbank MA in Vietnam

1 NATIONAL ECONOMICS UNIVERSITY ADVANCED EDUCATION PROGRAM ****************** BACHELOR THESIS CURRENT SITUATION AND RECOMMENDATION FOR STRATEGIC BUYER SELECTION OF BANK M&A IN VIETNAM ACKNOWLEGEMENT This research could not have been written without Assoc Prof Dr… who not only served as my advisor but also encouraged and challenged me throughout the process He and the faculty staff, guided me through the research process, never accepting less than my best efforts I would like to express my special thanks of gratitude to them all Secondly I wish to thank all those who helped me Without them, I could not have completed this project ACKNOWLEDGEMENT TABLE OF CONTENTS PREFACE ABBREVIATION LIST OF TABLES LIST OF FIGURES CHAPTER 1: INTRODUCTION 1.1 Rationale 1.2 Research objective 1.3 Research questions 1.4 Research methodology 1.5 Research scope 1.6 Research structure CHAPTER 2: THEORITICAL BACKGROUND OF CHOOSING STRATEGIC BUYERS IN BANK M&A 10 2.1 History of bank M&A 10 2.1.1 M&A definition 10 2.1.2 History of M&A activities 11 2.1.3 History of bank M&A activities 14 2.1.3.1 Motives of bank M&A 16 2.2 M&A process over the world for banking sector 19 2.3 Strategic buyer selection in bank M&A 23 2.3.1 Strategic buyer definition 23 2.3.2 Factors affecting strategic buyer selection in bank M&A 24 2.3.3 Risks in strategic buyer selection of bank M&A 26 2.3.4 Methods in strategic buyer selection in bank M&A 26 CHAPTER 3: REAL SITUATION OF BANK M&A IN VIETNAM 28 3.1 Real situation of bank M&A in Vietnam 28 3.1.1 Bank M&A process in Vietnam 28 3.1.2 Real situation of bank M&A in Vietnam 31 3.2 Real situation of strategic buyer selection of bank M&A in Vietnam 33 3.3 Evaluation of strategic buyer selection of bank M&A in Vietnam 35 CHAPTER 4: CASE STUDY OF STRATEGIC BUYER SELECTION OF BANK M&A IN VIETNAM 37 4.1 Vietinbank and its strategic buyer selection 37 4.1.1 General information about Vietinbank 37 4.1.2 General information about two potential buyers of Vietinbank: IFC and Bank of Nova Scotia 38 4.1.3 Evaluation of both deals 38 4.2 Recommendation on Vietinbank Strategic buyer selection 44 4.3 Critical success factors in choosing strategic buyer 46 4.4 Some recommendation to support strategic buyer selection in Vietnam 47 4.4.1 The macro recommendation 47 4.4.2 The micro recommendation 50 REFERENCES PREFACE ABBREVIATION IFC: International Financial Corporation (World Bank) Nova: Bank of Nova Scotia TMCP: thương mại cổ phần – commercial joint stock NN: Nhà nước - State M&A: Merger and Acquisition FDI: Foreign Direct Investment WTO: World Trade Oganization IPO: Initial Public Offering CEO: Chief Executive Officer CAR: Cumulative Abnormal Return LBO: Leveraged Buyout GDP: Gross Domestic Product HĐQT: Hội Đồng Quản Trị - BOD DD: Due Diligence VN: Vietnam LIST OF TABLES Table 1: Classifications of M&A transaction 11 Table 2: Motives of bank M&A 16 Table 3: M&A process over the world for banking sector 21 Table 4: Bank M&A process in Vietnam 28 Table 5: Bank M&A in Vietnam 35 Table 6: Factors affecting the strategic buyer selection 38 Table 7: Literature sum in critical success factors 45 Table 8: Critical success factors derived from Vietinbank case 46 LIST OF FIGURES Figure 1: M&A activities 11 Figure 2: waves of M&A activities all over the world 12 Figure 3: Percentage of M&A transactions regarding to industry 32 CHAPTER 1: INTRODUCTION 1.1 Rationale Recently, the quantitative development of banking industry is considered to be a warning situation due to the fact that the increasing in number of banks does not well parallel with the quality at all The need of restructuring presents itself as a certain outcome and solution for this situation This condition does facilitate a very new business activity – M&A – which has found itself a way to become a hot cure for the core illness of the banking system Due to the limit of time, this research focuses on a very small but important stage of complex M&A process: strategic buyer selection With case study of Vietinbank in its strategic buyer selection process, this research would like to extract some experiences and critical success factors to be a reference for other banks in the near future 1.2 Research objective Vietinbank cases will be studied to clarify some lessons and success factors to recommend for strategic buyer selection process of other banks 1.3 Research questions What are some critical success factors in choosing strategic investors for banking sector? What are pros and cons of recent cases of Vietinbank in choosing strategic investors? 1.4 Research methodology The information used is both from primary and secondary sources The evaluation of the case study is written based on FAHP method with the data collected via survey and interview Other information comes from internet sources, researches of whom I would try my best to give references to 1.5 Scope of research Due to some limitation, this research focuses only on case of Vietinbank 1.6 Research structure Chapter 1: Introduction Chapter 2: Theoretical background Chapter 3: Real situation of bank M&A in Vietnam Chapter 4: Case study of Vietinbank 10 CHAPTER 2: THEORITICAL BACKGROUND OF MERGERS AND ACQUISITIONS 2.1 History of Bank M&A 2.1.1 M&A definition M&A stands for Mergers & Acquisitions On Wikipedia, merger is a combination of the two companies to become a bigger one The transactions of this type are usually voluntary and mostly financied through stock swap - (swap the old company’s shares to the new company’s shares at a rate corresponding with the contributed capital to the new company - this ratio is determined based on the agreement signed on) or paid in cash An agreement similar to an acquisition, however, results in creating a new company name (usually the name combines the original name of two companies) or a brand new one However, in some cases, an agreement or transaction referred to an acquisition which is purely political purpose or strategy marketing, the acquisition or consolidation of this kind usually involves payment in cash And acquisition shall be constructed as an act of takeover by acquiring a company (referred to as the target company) by another company Previously, to make an acquisition, companies often negotiate with collaboration, but later on, this form changed, and the acquisition can take place when the target is not willing to sell, the buy party can purchase and the purchased does not know anything An acquisition generally refers to a small company is acquired by a larger company, but sometimes the smaller one can win the right to manage a larger company or is older or changes name into new company to buy the company A special case of the acquisition is a form of reverse acquisition - reverse takeover, which is a form of a private company seeking to purchase a public shareholding company which will also become a public company part of them without making IPO process As defined in Vietnam 2005 Enterprise Law, a merger of enterprises is when "One or more companies of the same type (referred to the merged company) may be merged into another company (referred to the acquirer) by transferring all assets, rights, obligations, rights and legitimate interests to the one new company, and ended the existence of the merged company" And integrating the enterprise is when "Two or more companies of the same type (called old companies) may merge into a new company (referred to a consolidated company) by transferring all assets, rights and legitimate interests to the consolidated company, and ended the existence of the old companies." 42 Vietnam Buyer’s advisor firm Time consistence Offer price and other benefit Experience & knowledge in M&A Reputation Flexibility and cooperation to get the deal done Post M&A Restructure in HR Culture integration Restructure in policy Merge Accounting – Finance departments Shared resources (capital, distribution, expertise, knowledge…) Expand the business Cost saving External Buyer’s home economy Unstable Vietnam economy B Quantitative results of the evaluation process Cash offer: We can see the price and other benefits that IFC offers to buy are much higher than that value of Nova At the beginning of 2011, when the IFC deal is over, what Vietinbank get is about $ 300 million, including a 10% stake x 21000 VND per share = ~ 182 million and a second loan issued $ 125 million with maturities of 10 years and months, interest rate = LIBOR + 1.5% a year Vietinbank said this stock was not 43 underpaid, plus best interest rates in Vietnam at that time We can say the deal offers great value in cash Vietinbank Meanwhile, also at that time, Nova and Vietinbank has signed a preliminary agreement to sell 15% stake x 22000 VND per share, plans to close the deal in Quarter III of that year 2011, and money will be paid in early 2012 However, due to many reasons, one is Vietnam law was not able to protect the enterprise in a complex world as M&A market, Nova at the last moments required to receive dividends and capital gain in 2011 This pushed stock price that Nova would pay down to 19000 VND State Bank did not accept this price and the deal couldn’t be finished It’s clearly that over the world, with strict rules, and the power of the media, with agreement in early 2011 with 22,000 shares (the payment would be made after year ignoring the inflation, especially with high inflation as at present) Nova couldn’t turn the situation more conducive to its side like that Without cooperation, this deal caused loss of time and effort for both parties On reputation, IFC also had advantage over Nova IFC is a finance company under the World Bank, specializing in lending to developing countries to promote economy and create conditions for the dynamic business environment, so the appearance of the IFC as a strategic investor is to ensure and attract other investors later Nova is also a 3rd largest bank in Canada, with markets in China and Thailand The interest of Nova in Vietinbank probably was due to the presence of the IFC investment Moreover, the cultural experience was a disadvantage of Nova, IFC has been investing in the environment of developing countries like Vietnam, in particular in Sacombank, Vietcombank the largest joint stock banks in Vietnam, while Nova was only available in major banks in the Thai market, China However, over a number of other important factors, we can understand the reason for the difference of these two deals Nova's share price was on the rise, while IFC's current stock price was down This actually did not say much about anything, apart from the thing that Nova would be pretty hard in the evaluation of potential sellers, to benefit their business It is possible that after the IFC investment in Vietinbank, Nova was interested in Vietnam as part of plans in Asia (next to the Chinese market and Thailand) However, Vietinbank could not convince Nova as a potential partner, Nova was seeking for its perfect pieces Perhaps the worriness derived from the credit institutions’ concern about the situation of the restructuring of banks in Vietnam 44 Fitch Ratings had recently made a rate to restructuring that the government is pursuing (NPL acquisitions, capital raising, mergers ) which was positive for the financial system in Vietnam However, the company also said that the proposal was not really clear, as well as uncertainty in the level of commitment and ability to follow through with the proposal, those would pose risks in the short - medium term Weak capacity of capital, tight liquidity and asset quality was going down are some of the most disturbing points about the banking system of Vietnam Therefore, the Government's efforts to address these issues were positive responses The financial system of Vietnam in general would benefit from the restructuring of the banking system, because restructuring could reduce the risk of losing the liquidity of small banks However, asset quality of banks would continue to go down in the near future The organization said that bad debts in banks Vietnam can be times higher than current if calculated according to international accounting standards (compared to current standard of Vietnam) The absence of a detailed restructuring plan was exactly the point that made Fitch analysts worried."There are no specifics about time the government may launch the restructure, the scale of the plan to buy bad debt or the price that the government will pay for that bad debt Without these details we cannot measure will restructure the bank benefit the economy?" Fitch credit ratings put long term B + for Vietnam, which reflects the risks of high inflation with GDP growth as well as debt obligations at a high level of state enterprises and banks in Vietnam On 9/11/2011, Standard & Poor's (S&P) raised the level of risk assessment in banking system (BICRA) of Vietnam from the "Group 9" to "Group 10" - the highest-risk group According to experts, the S&P was right to point out issues of the banking system in Vietnam today as it’s in the period of saturation, or be driven by "administrative order" with massive credit growth in few years Scale BICRA presents assessment of S&P on the level of risk that a bank is operating in a country in particular and the entire banking system in general, compared with banks in other banking system S&P groups ranks from (lowest risk group) to group 10, (the highest risk group) Scale BICRA based on two criteria for evaluating the risk of the economy and risk of the industry, S&P assessed the risk of Vietnam economy in the top 10, and risk of sectors in group 8, the total in scale BICRA Vietnam was among the top 10 The situation of rapidly increasing bad debt and liquidity problems of small banks (highly related to real estate collapse, the stock market and the ability to attract deposits from the public) were the most notable concerns of Vietnam's banking system at that time Perhaps this was one of the reasons for S&P to rate banks in Vietnam in the highest risk group 45 Adding more negative was evaluation from Moody's on the Vietinbank with credit rating at B2 Most of the bank's criteria were ranked at a stable level such as foreign currency bonds but not high levels of foreign currency deposits and bonds, these factors carried negative outlook for banks and in accordance with the foreign currency ceiling prospects in Vietnam Moody assessed the financial strength (BFSR) of E + for Vietinbank In particular, the credit rating base (Baseline Credit Assessment - "BCA") at the B2 level, showed that the credit strength of the banking facilities were limited: The low ability to face risk, weak asset quality as well as provision for doubtful debts was lower than other banks in the world In addition, Moody's results also showed that the proportion of loans for individual customer’s high, tight liquidity in the context of the challenging business environment in Vietnam Moody's also noted the size of Vietinbank franchise property Major customers were state-owned enterprises also created a stable source of revenue for Vietinbank In addition, there were potential benefits in improving the level of investment from the IFC strategy, holding 10% stake in Vietinbank Tier capital ratio of Vietinbank the end of 2011 as calculated on a Basel standard is 9.8% This is higher than the rate of 9% stipulated by SBV However, according to Moody's assessment of the ability to cope with the mediumterm credit risk of the bank in the stress condition, it is weaker than other banks According to Moody's, the quality of bank assets were in a decline and the level of bad loans truly due to international standard was difficult to estimate Pursuant to the Vietnam Accounting Standards (VAS), the bad debts rose to 2,200 billion VND (accounting for 0.8% by weight of total loans) at the end of 2011 from $ 1,500 billion (up 0.7%) in late in 2010 However, if based on international accounting standards IFRS, the bank loans back in late 2010 were up to 9400 billion and that's what made Moody's skeptical about the actual number of bad debts Similar to most banks in Vietnam, the liquidity in Vietinbank very tight, with lending rates on mobilized about 114% in late 2011 (compared to 115% the same period in 2010) In summary, review of the reputable credit rating organizations could cause foreign investors to seriously reconsider its decision to buy the stake in Vietnam bank for their long-term development objectives Back to VietinBank's case, the clients of IFC are small and medium enterprises which have potential in the emerging and young markets Nova was operating in the field of banking and financial sector as of Vietinbank This made the experience of Nova with customers more valuable than IFC’s 46 It’s clearly that IFC could provide cash loans to Vietinbank easily to invest in early development, but in the long run, Vietinbank would need the new partners such as Nova to get beneficial for all aspects of economic business Fourthly, as long-term strategy in Vietnam, including Vietinbank, IFC also invested in many other banks however, after the bank’s stake was making profit, IFC got out For example, in addition to IFC, there were other funds such as REE, ANZ, Dragon Capital holding Sacombank shares Every year, Sacombank planned to issue more shares to the shareholders without noticing that funds could not and would not invest in a company continuously This made coalition ACB – Eximbank collect the Sacombank’s shares easier In essence, the funds have cash and more easily invest in the stock of potential businesses, then they just wait for a little profit and sell immediately to make up compensation for other loss stocks in the portfolio That is the principle of operation of the funds They are not interested in any long-term aspects of the business It should be convinced that the IFC investment was a good starting point for Vietinbank along with management skills Analysis ferrets out the difference between business to discuss the selection of strategic investors in the long term future of Vietinbank as well as other joint stock commercial bank The next factor that Nova worths more was the sharing of resources and business opportunities to expand IFC had an advantage in technical support management and international business development, those were undeniable Along with Vietinbank, IFC was also sponsoring Sacombank and ACB as well as other potential businesses 4.2 Recommendation on Vietinbank’s strategic buyer selection Oriented strategy in the short term and long term vision of Vietinbank was the goal of becoming a major financial institution's in economic activities in the model Financial Group - Bank with diversified services and best quality products based on scientific application of modern technology, advanced management degres Revolving around with two axes was essentially balancing commercial banking (banks) and financial investment activities The role of foreign strategic investors from the perspective Vietinbank was very important, as indicated in the following points: - Financial support; - Technical support: technology transfer, particularly in risk management, product development services, system optimization, product pricing and performance measurement products and services; - Support for governance: appointment of representatives involved in the management of 47 business operations of VietinBank, and participate in strategic business planning at both the enterprise and supply products This was a pretty good direction in choosing a foreign strategic investor The first time through the active contact, VietinBank received special attention from a large number of financial institutions in the world and had business strategy and operational model consistent with the strategic direction of VietinBank These included organizations such as Wells Fargo (USA), Banque Populaire (France), Commerz Bank (Germany), Mizuho (Japan), (recently Mizuho bought shares in Vietcombank with very well price and certainly (by law) would no longer intend to pursue anything further with Vietinbank) However, after the deal failed to Nova (along with the deal Mizuho-Vietcombank, Nova was another quite the hit in the area of Vietinbank), Vietinbank was looking for strategic investors to sell 15% stake, 28-30 000 VND per share On 18.08.2011, the State Bank approved phase of Vietinbank capital increase from 16,858 billion to 20,230 billion through the issuance of par value ratio of 20% for existing shareholders Looking at the Shareholder's report of Vietinbank on raising the charter capital up to 31 trillion in 2012 (from 18 trillion in 2010), and the placement of the stock with the price 28-30 000 VND, we can see the ambition and strategy of Vietinbank in long term heavily related to money in cash This roadmap of Vietinbank was too fast compared with Vietcombank (offered to sell before but closed the deal with Mizuho after) The problem of this policy was its much potential risk in the long term These risks have been analyzed in the upper part of this thesis, following are synthesis of the major risks that Vietinbank may be encountered - The deal with IFC was a good deal, thanks to the IFC, Vietinbank could attract foreign investors However, when the very first foreign investor appeared (Nova), Vietinbank has failed to negotiate and sell to Nova The deal failed due to many factors, but undeniably Vietinbank did not succeed in “polishing” itself (for example, the negative evaluation of Moody's) That made Vietinbank not really attractive target for strategic investors - Keeping the policy and capital increase plan as at that time, plus the route joining in WTO of Vietnam, the government would gradually remove barriers to promote the M&A development, Vietinbank could easily go into track of Fans Asia Vina and Vinacafe Bien Hoa when the cash offer of the funds were usually pretty easy and at good price - A further concern lesson also rising from Asia Vina Fans is hedge funds suspended all decisions related to business expansion as well as long term investments, because they needed the revenue index and the growth rate booming in short term (as if they are feeding 48 to resell later) After achieving a desired level of interest, they immediately sold out The investment funds usually pay more in cash and easily because they are rushing to buy every opportunity; they are not difficult in judging partners because they will take interest in this place to make up for losses elsewhere This is a classic diversification strategy focusing on short-term of all the funds - If the partners were working in the same sector (as Nova), with knowledge, experience (same-sized banks in China and Thailand) they could share long-term goals and expertise with Vietinbank These guys underestimated Vietinbank (Nova paid only 19000VND per share and Mizuho also turned to Vietcombank) 4.3 Critical successful factors in choosing strategic buyers Table 7: Literature summary on critical success factors Academi Rockwel Seek a good fit cs l 1968 DiGeorg Time, resources and tools for M&A analysis io 2002 Selecting the right leadership Detailed planning - Communication plan - Integration plan - People plan Practitio golden Setting rationale: key rationales are active investing, ners rules growing scale, building adjacencies, broadening scope, gadiesh redefining business, and redefining industry et al Letting the ‘why’ inform the ‘how’: the right strategic 2001 rationale will inform the preparation and valuation of the merger, what leadership and communication style to adopt, and how to plan for post-merger integration Fusing at full speed: set clear milestones, require active management to achieve these milestones, act fast A sense of urgency is essential during the early stage keys to Strategic Vision and Fit: Clear merger rationale articulated merger and focused on long-term competitive advantage and success designed for synergies in size, geography, people, or Epstein services 2005 Deal Structure: Price paid and types of financing are appropriate and beneficial Due diligence: Conducts a formal review of assets, 49 liabilities, revenues, and expenses and evaluation of culture, organizational fit, and other nonfinancial elements External factors: External factors that damage the longterm merger value are distinguished from those that only damage the short-term perception due to temporary stock declines Table 8: Through case study of Vietinbank, subjects had to clarify the conditions, how to apply and give a very intuitive conclusions about the advantages and problems of the partners (foreign) potential Long term strategy in Vietnam Legality Liquidity Legal issues Business Operation 4.4 Some recommendations for supporting the Vietnam banks in M&A 4.4.1 The macro recommendation: A Building a legal framework system for M&A activities Building a legal framework for the operation acquired, merged firms is now an acute need to create certainty in the implementation process in terms of management, responsibilities and interests of the participants The most important issue in building a legal framework for M&A activity in our country today is to quickly provide a unified guideline dedicated to regulate this activity To address acquisition activity, merging firms are being addressed and regulated in many different Law by the different aspects but not have a copy of the management rules specific to this activity is a flawed great In particular, the legal framework for M&A activity in Vietnam should pay attention to the contents: B The definition of M&A should be consistent throughout the legal system Concept in the law of Vietnam and World should be unified in acquisition, merger activities "Acquisition" is the form that a company buying back some or all of the shares or assets of another company to gain control of that company 50 "Merger" is a combination of the two companies to form a new company with a value greater than the value of the operating company The acquired businesses may be a branch, subsidiary or business enterprises to buy to buy to see money used to buy back some other companies is a long-term investment should not necessarily be identical in shape move between businesses to buy and buy businesses C M&A activities should be clarified into specific branches: In the M&A practice often does not show the nature of the business that beyond it in terms of legal, not split the form of acquisition activity, merged companies on the basis of the nature of each transaction which should divide the forms that are easily manageable and limited control function of the negative effects it may cause For businesses, the acquisition activity should be divided into two forms: acquired by purchasing stock or assets of the acquired company For the merged entity will be managed companies through merger activities vertically, horizontally and vertical merger merger-style corporation D There should be some government agencies that are directly responsible for M&A Normally active acquisition, merger laws in the world are monitoring the angle of competition should be management agency in the market competition is the conduct and control management M&A activities of enterprises Thus, to match international practices, the competition-managing agency (the Competition Management Department) is the most appropriate agency to oversee acquisition activities, corporate merger E The prohibited M&A activities should be clarified into documents In legal documents on M&A, required content regulations on the types of acquisitions, mergers DN forbidden to have basis to prevent the effects are not good of this activity to the economy and handling transactions with intentionally causing a negative impact there The M&A are prohibited such as: There are after market share combined account for over 50% of the market concerned Because these transactions fall into the cases of economic concentration prohibited provisions in Article Competition Act Thus, in order to timely prevent prohibited activity, then the relevant businesses or agencies directly managing acquisition activities, merging firms may require investigation if it suspects or has some evidence that the intended acquisition of the partners F The responsibilities, rights and obligations of the consultant in M & A transactions should be clarified M&A activity should involve consultation of multiple objects, such as brokers, financial advice, legal advice Due to the complexity and importance of M&A activities for a lack 51 of business and professional responsibility of advising companies can lead to serious consequences that businesses suffer G There should be laws that protect the interests of employees and shareholders of the company in M&A Usually in the M&A transactions, the rights of the employee shall be placed on the table after the last balance the interests of business owners and senior managers or sometimes ignored Thus, in the documents regulating and monitoring activities acquired, merged company will require provision of the minimum conditions to ensure workers H Cross border M&A should be discussed and controlled The foreigners working in Vietnam under the Law on Foreign Investment in Vietnam, the procedures and conditions to implement M & A activities conducted under the general regulations The foreign unprecedented operation in Vietnam, or business activities in Vietnam but not according to the Law on Foreign Investment in Vietnam, the process and procedures for M & A also made as to what have determined and must also comply with the conditions and procedures for foreign direct investment I The M&A market should be developed professionally This is a practical solution to promote the further development of M&A activity in Vietnam in the future M&A transactions are often kept secret until the agreement of both parties were officially approved and adopted in writing To build professional markets need to perform the following tasks: J There should be more transparent in any transactions Management agencies to promulgate regulations for written disclosure of all business objects in the economy At the same time should clearly specify the types of information and forms to disclose information that companies must be obliged to provide timely and adequate management agency market Channel information can also be implemented by management agencies to ensure the accuracy and transparency of information To increase transparency for the information they need quickly announced implementation of accounting standards, accounting controls of the company more closely through the work of internal audit and independent K The manager staff has to be trained carefully to raise awareness toward M&A activities A request to build M&A market is professional staffs understanding and having experience in this field 52 The training of human resources to implement the cooperation of all the businesses, consulting firms, and for the direct management agencies in this market L The development of professional consulting firms for M&A should be facilitated Market acquisition, merger activity is sustainable enterprises rely on consultants in this field M&A market in the future in Vietnam needs a professional, strong in all aspects of the consulting firm Vietnam needs to accept the presence of foreign consultants in this field Must create conditions for domestic companies are eligible for financial and technical Encourage and allow securities firms, commercial banks have the capacity to open consulting firm for M & A implement preferential tax policies in the first year of operation for the consulting firm Facilitate licensing and quickly established consulting firm for M & A activity at home and abroad if eligible 4.4.2 Micro Recommendation A Enterprises should focus on defining objectives when conducting M&A The identification of targets to be achieved by an acquisition or merger is a very important work because it is the basis for determining the content companies need to for the transaction, as a basis for evaluating result of the transaction, helping businesses make the next steps such as identifying partners, content to be negotiated and the work should be done in the negotiation process and incorporated businesses B Business partners need careful analysis to avoid takeover The analysis of a partner in what should be done to avoid being acquired by other companies through acquisition and merger activities Analysis and evaluation of business partners to focus on content such as the production situation, the company's business, financial condition and tax liability of companies for the current contract and future, human resources, corporate culture, and ways of organizing information systems of enterprises C Enterprises should be cautious in the negotiation process The negotiation process is the process of direct discussions between the two parties to reach a final decision is made or not made the transaction The results of the negotiation process will affect the future operations of both sides, so the caution in the negotiation process is a mandatory rule Art to achieve the desired results in a negotiation also depends on one's own skills in negotiation, so the selection of those in this section is a work should be focused The staff in the department to negotiate those with the responsibility of enterprises, professional qualifications in the field that they are undertaking in the department implements M&A 53 D Various valuation methods should be considered Valuation of the company is a very important and powerful impact on the outcome of a trade sale, merger companies DN valuation results will form the basis for the agreement M&A For buyers, the exact valuation of the target company will help businesses avoid buying too star set against the actual capacity of partners For sale, firm's exact pricing will help them avoid being acquired by the partners to accept prices lower than the actual value of the company The valuation of the company is a really hard job, it depends very much on the subjective evaluation of person Therefore, depending on the type of business that the business valuation method will select the appropriate valuation./ 54 REFERENCES Wikipedia History of M&A http://www.economywatch.com/mergers-acquisitions/history.html History of bank M&A http://www.economywatch.com/mergers-acquisitions/international/banking-sector.html Financial Vs Strategic Buyers Marc Martos-Vila, UCLA, Los Angeles, CA Matthew Rhodes-Kropf, Harvard University, Boston, MA First Draft: November 2010 Current Draft: September 2011 Preliminary Comments welcome http://samvak.tripod.com/nm063.html Risks in strategic buyer selection http://www.americanbanker.com/bankthink/merger-and-acquisition-wave-will-comestrategic-buyers-realistic-sellers-1045045-1.html M&A IN VIET NAM: REALITY AND FUNDAMENTAL SOLUTIONS Nguyễn Hòa Nhân, TẠP CHÍ KHOA HỌC VÀ CƠNG NGHỆ, ĐẠI HỌC ĐÀ NẴNG SỐ 5(34).2009 Trường Đại học Kinh tế, Đại học Đà Nẵng Research: Way to success for M&A Vietnam TRƯỜNG ĐẠI HỌC KINH TẾ TP.HCM WTO and Vietnam laws about strategic buyers http://www.langson.gov.vn/langsonqt/?q=node/850 Fitch and S&P about Vietnam bank credit rating http://vneconomy.vn/20120308103154120P0C6/fitch-ratings-tai-co-cau-ngan-hang-cuaviet-nam-chua-ro-rang.htm http://tintuc.xalo.vn/001464460303/Bi_SP_ha_bac_Ngan_hang_Viet_Nam_nhin_lai_minh html?id=61fe4d&o=0 http://www.baomoi.com/Xep-hang-tin-nhiem-o-Viet-Nam/126/2971257.epi 55 Moody’s http://www.xaluan.com/modules.php? name=News&file=article&sid=358063#ixzz1s4jm9EpS http://www.xaluan.com/ Bank M&A in Vietnam http://vef.vn/2012-03-18-loi-di-nao-cho-sap-nhap-ngan-hang-viet-namVN Bank M&A post M&A http://www.tinmoi.vn/sap-nhap-ngan-hang-nguoi-un-vao-ke-day-ra-04839478.html Vietinbank strategies http://www.vietinbank.vn/web/home/vn/news/09/090724_2.html Commercial bank restructure Bản tin Nhà đầu tư – T1/2012 Đề tài: Các yếu tố thành công dự án Hoang, Thuy Vu Nga Lapumnuaypon, Kamolrat 56 INTERNSHIP REPORT ASSESSMENT Signature of Supervisor ... 3.1.1 Bank M&A process in Vietnam 28 3.1.2 Real situation of bank M&A in Vietnam 31 3.2 Real situation of strategic buyer selection of bank M&A in Vietnam 33 3.3 Evaluation of strategic buyer selection. .. strategic buyer selection of bank M&A 26 2.3.4 Methods in strategic buyer selection in bank M&A 26 CHAPTER 3: REAL SITUATION OF BANK M&A IN VIETNAM 28 3.1 Real situation of bank M&A in Vietnam. .. selection of bank M&A in Vietnam 35 CHAPTER 4: CASE STUDY OF STRATEGIC BUYER SELECTION OF BANK M&A IN VIETNAM 37 4.1 Vietinbank and its strategic buyer selection 37 4.1.1 General information