A series of M&A deals in the pandemicLast year, despite the difficulties from the Covid-19 epidemic, the market of merging, buying and selling real estate enterprises (real estate) or buying projects still prospered. Many experts believe that the difficulty caused by the epidemic is an opportunity for businesses with financial potentials, cash flows to increase assets that were previously difficult to implement for many reasons. In June 2020, LDG Investment Joint Stock Company (HoSE: LDG) announced the transfer of Song Da Riverside apartment project from Quoc Cuong Gia Lai Joint Stock Company (QCGL). Accordingly, LDG Investment acquired a 99.9% stake in Hiep Phuc Real Estate Joint Stock Company – the legal entity that owns the above project (a subsidiary of QCGL) for VND 626 billion. After the deal, LDG Investment changed the project’s name to LDG River luxury apartment complex, located in Thu Duc district, Ho Chi Minh City with a total estimated investment capital of about VND 4,400 billion. The project has a size of more than 2.8 hectares, is one of the five new strategic projects of LDG. LDG River perspective after M&A implementation. Photo: LDG
In November 2020, Keppel Land through its subsidiary Portsville transferred a 30% stake in Dong Nai Waterfont City project to Nam Long Investment Joint Stock Company (HoSE: NLG) for 1,951 billion dong. Thus, when completed, Nam Long will own 100% of the capital in the 170-hectare project in Long Hung, Bien Hoa, Dong Nai. Nam Long said that the Waterfront City urban area has about 3,000 low-rise housing products in the real estate ecosystem including utilities, healthcare, schools … expected to launch the first products at the beginning. year 2021.
In early December 2020, Him Lam Real Estate Corporation (Him Lam Land) bought 21.49% capital of Construction Investment and Development Corporation (DIC Corp – HoSE: DIG). The trading value is about 1,450 billion dong. Therefore, Him Lam Land became a major shareholder of DIC Corp. This move of Him Lam Land took place after DIC Corp’s shareholder did not agree with the policy of cooperation between the two sides for the investment in North Vung Ta New Urban Area, an area of 90.5 hectares with a capital of about 10.00 billion.
Also in December, Covestcons Company Limited (under Coteccons – HoSE: CTD) bought over 8.1% capital of Idico Corporation, becoming a major shareholder. The purchase of Idico is also in line with Coteccons’s orientation of expanding into new areas such as industrial construction, in addition to doing simple construction projects.
M&A opportunities in 2021
Many real estate businesses also gradually open up their M&A opportunities in 2021. An Gia Real Estate Investment and Development JSC (HoSE: AGG) said that they are negotiating to buy 30 – 50 hectares to develop low-rise projects. and has deposited a deposit on a 3,000 product project in Binh Duong. Considering the expansion of land fund as a cross-cutting strategy, An Gia affirms constantly to seek opportunities, implement M&A, prioritize clean land, have clear legal status and fast implementation time.
Nam Long Investment Joint Stock Company (HoSE: NLG) is also implementing M&A procedures for two land areas in the East of Ho Chi Minh City (District 9, Thu Duc) with a total area of more than 100 hectares, expected to be implemented in the period of 2020 – 2021. The value of each project is more than VND 2,000 billion, according to company representatives. At the same time, according to the plan, in 2020, Nam Long will also transfer capital from 2 projects Dong Nai Waterfront (170 ha, Dong Nai) and Paragon Dai Phuoc (45 ha, Dong Nai), expected to bring 725 billion VND. financial income.
VNDirect Securities Company believes that the M&A deals will help the real estate market in 2021 be more active. The legal approval process lasted since mid-2018 and the impact of the Covid – 19 translation has caused many small-scale developers to face financial problems. This has created opportunities to hunt for land for real estate companies with strong financial potential. According to Colliers Vietnam, in the first nine months of 2020, at least 10 new foreign developers from Korea, Japan, China and Singapore are looking for opportunities to enter the Vietnamese market. This number is surprising when compared to the current 12-15 foreign developers in Vietnam, due to Vietnam’s good control of the Covid-19 pandemic outbreak.
The report highlights M&A deals, especially the transfer of component projects in large-scale projects that are considered the fastest solution for foreign investors entering the Vietnamese market and Domestic investors to expand their land bank. As observed by VNDirect, a number of projects from large companies are in the process of negotiation, some have completed negotiations on important financial terms in the fourth quarter of 2020. The report expects these deals to be completed in 2021 thanks to improvements in the legal framework from the new Law on Investment 2020, effective 1 January 2021. One of the notable recent M&A deals mentioned by VNDirect is Novaland Group (HoSE: NVL) completing the acquisition of 286 hectares of land in Dong Nai, along with a number of small deals with localities with total worth up to $ 1 billion.
Source: ndh.vn – Translated by fintel.vn