Singapore M&A Deals In Vietnam - Record High of US 72 Million

Singapore M&A Deals In Vietnam Tripled To US$72m

Total Mergers and Acquisitions (M&A) deals from Singapore into Vietnam has hit a record high of US$72 million this year, which represents a more than three-fold increase from the previous year’s US$23 million worth of deals. Singapore’s record deals were in line with the overall increase in level of M&A activity in Vietnam. According to the quarterly Spotlight Asia report, Vietnam’s 12-month M&A activity from August 2011 to July 2012 reached 22 deals totalling US$2.5 billion (which is more M&A capital inflow than any other year over the past decade) in spite of teething problems on its economic policies and corruption that may have deterred investors. A report co-published by mergermarket and Kroll Advisory Solutions shows that Singapore companies have invested US$203 million in Vietnam through 10 M&A deals since August 2007 to July 2012, with most of the M&A activity (four deals completed) focused in the industrials & chemicals sector.

Significance: Opportunities for investors in Vietnam is arising as the government have pushed to clean up its state-owned companies as a part of its economic plan to transform the once former communist nation. However, the progress has been slow and not free of controversy.

mDR Makes A Comeback With An Exclusive Deal With Nokia

mDR Limited, a telephone equipment and after-market services company, has been appointed as Nokia’s sole authorised distributor in Singapore with effect from 10 September 2012. While the company has been one of Nokia’s long established distributors here since 2004, the latest deal signed through mDR’s wholly owned subsidiary A-Mobile takes its relationship with Nokia a step higher by appointing it as the only distributor in Singapore. The announcement came at an apt timing when Nokia seems poised for growth after four years of decline when its Symbian-powered phones did not catched the eyes of consumers who turned to a new generation of smartphones made by Apple and Samsung. Fortunes have turned as its Nokia Lumia 920 and Nokia Lumia 820 smartphones, the first devices using a Windows Phone 8 system, and its Nokia Pure View imaging technology feature in these phones have also received positive market-wide acclamation.

Significance: Technology experts have said the recent court battle between Apple and Samsung, and Nokia’s decision to adopt Windows 8 for its smartphone could mark the resurgence of the brand. Hence, the deal could not have come at a better timing as Nokia’s new smartphones are due to hit the Singapore market in 3Q12.

TA Corp Ventures Into Motor Oil Distribution Market

TA Corporation (listed on SGX late last year) has acquired the entire business of Sino Tac Resources – the sole distributor of British Petroleum’s (BP) motor oils and lubricants in Singapore – for $2.8 million, as part of the property and construction group’s strategy to broaden its income stream. The move into the high-performance motor oil and lubricant market is aimed at creating value for shareholders and also serves as a strong platform for future growth in South-east Asia. Neo Tiam Boon, TA Corporation’s chief executive officer said: “While the real estate development and construction businesses remain the group’s core focus, we will selectively acquire earnings-accretive businesses that will diversify our revenue streams and act as a platform for us to explore opportunities in other high-growth industries.”

Significance: Sino Tac Resources boasts an established track record and has been the exclusive distributor of BP’s lubricating fluids in Singapore since 2007. The acquisition into an established and growing business could prove to be winning strategy for TA Corp as it seeks to enhance shareholder value through business diversification.