Luận văn legal procedures and foreign restrictions on conducting a merger and acquisition m và a transaction in the vietnamese laws

VIETNAM NATIONAL UNIVERSITY, HANOI SCHOOL OF LAW THAN THU THAOQ LEGAL PROCEDURES AND FOREIGN RESTRICTIONS ON CONDUCTING A MERGER AND ACQUISITION M&A TRANSACTION IN THE VIETNAMESE LA

VIETNAM NATIONAL UNIVERSITY, HANOI

SCHOOL OF LAW

TILAN THU TITAO

LEGAL PROCEDURES AND FOREIGN RESTRICTIONS ON

CONDUCTING A MERGER AND ACQUISITION (M&A)

‘TRANSACTION LN THE VIETNAMESE LAWS

UNIVERSITY GRADUATION TIIESIS

MAJOR: BUSINESS LAW

Type of Training : Full-time Course

Ha Noi - 2018

VIETNAM NATIONAL UNIVERSITY, HANOI

SCHOOL OF LAW

THAN THU THAOQ

LEGAL PROCEDURES AND FOREIGN RESTRICTIONS ON

CONDUCTING A MERGER AND ACQUISITION (M&A)

TRANSACTION IN THE VIETNAMESE LAWS

UNIVERSITY GRADUATION THESIS

MAJOR: BUSINESS LAW

Type uf Training : Full-time Course

Supervisor : PhD Phan Thi Thanh Thuy

Ha Noi - 2018

CERTIFICATE OF AUTHORSHIP/ORIGINALITY

I hereby declare that this Graduation Thesis is of my own and

instructed by PhD Phan Thi Thanh Thuy It has not been previously

submitted for a degree or diploma at this or any other higher education

institution To the best of my knowledge and belief, this Graduation

Thesis contains no matcrials previously published or wrillen by another

person except where due reference or acknowledgement is made

I bear full responsibility for the fidelity of the number and data and

other contents of my graduation project

Sincerely thanks!

Hanoi, 03" April 2018

Signature of Bachelor Candidate

Than Thu Thao

- Book “Mergers & acquisitions: A step-by-siep legal and practical

guide”, Edwin T Miller Jr., 2007;

- Mergers & acquisitions from A to Z, Second Edition, Andrew J Sherman and Milledge A Hart, 2006,

nhìn quản trị céng ty”, Assoc Prof., PhD Pham Duy Nghia, School of Law,

Economic University, Ho Chi Mimh City, 2011,

- Article “Mergers and acquisitions in Vietnam pitfalls and

resolutions”, Le Net, Partner al LNT & Partners and Arbitrator al the Vielnam

International Arbitration Centre, 2014;

- Article “As M&As rise, legal issues pose challenge, Dang Duong

Anh, Managing Partner al Vietnam Intemational Law Firm, 2016;

- ‘Ten key M&A legal issues for foreign investors in Vietnam; Linh Bui, Robert Fish and Bill Magennis, Partner of Allens and Linklaters, 2017

The papers and publications mentioned, however, focus principally on

M&A legal issues from a general perspective Innovations in the national

logislation are cvident in the attcmpis of Vietnam Lo comply with the international M&A provisions However, there is not yet a comprehensive

study of Vietnam’s compliance of detailed legal procedures in an M&A

transaction and Victnamesc laws’ restriction Attempting to cover that gap

and aiming to help to attract both foreign and domestic investments in line

with intemnational standards, this Thesis makes an contribution to the field

with an assessment of the “Legal procedures and foreign restrictions on

conducting an M&A transaction in the Vietnamese laws”

3 Research Objective

Vietnam continues to attract foreign investment Apart from via direct

investment, the foreign investors also achieve market access by way of M&A,

impacling upon deal structures in Viclnam The cost and lime which is

considered to be twa success points in business will be taken into account if”

the investment procedures are diffusive This Thesis hereby may help the

forcign mvestors targeting Vietnamese market choose a method of investment

in the consideration of expenditures and term In addition, legal aspects in the

process of an M&A transaction will be discussed as well in order for the

investors to know exactly what they have to do after having chosen M&A

method

2 Literature Review

M&A in general, steps to carry out an M&A transaction in particular as

well are not unfamiliar issues but how a foreign investor gets through the

foreign resticuions in Vicinamese laws to successfully close Lhe deal still

remains curiosity and needs to be taken into account We can list out the

following articles and researches by both lecturers and lawyers on the

aforesaid iss 10S

- Article “Vietnamese M&A, by the book”, Hoang Anh Nguyen, Pariner at law firm Mayer Brown JSM 2017;

- Article “Choosmg M&A investment to avoid lengthy license of

the foreign investors’, Lawyer Dinh Tien IIoang and Than Thu Thao, 2017:

- Book “The mergers & acquisitions revicw — Edition 11”, Hikaru Oguchi, Taro Hirosawa, Ha Hoang Loc, Partners at Nishimura & Asahi, 2017;

- Article “Some Recommendations of M&A Activity in Viemam

Today”, Phan Quan Viet, Falcuty Business Management, Sai Gon University,

2015,

- Article “Public mergers and acquisitions in Vietnam: overview”,

Oliver Massmamn, Iaane Morris Vietnam LIC, 2017,

ACKNOWLEDGEMENT

In working through this Thesis, I would like to express my sincere

gratitude to PhD Phan ‘hi Thanh ‘Thuy, who has given me invaluable instruction

I greatly approcialc Department of Business Law, School of Law,

Vietnam National University for facilitating my thesis

‘My greatest (hanks also go to my family, my supervisors at Violnam

International Law Firm (VILAF Hong Duc) and my dearest friends, who

always stand by and support me

INTRODUCTION

1 Necessity of the thesis

Since Vietnam joined the WTO and most recently TPP and ASEAN

Economic Community, Merger and Acquisition (“M&A”) market in Vietnam

has witnessed a remarkable change Many investors consider Vietnam to be

an ideal investment destination thanks to the strong annual growth economy, and the underlying factors contributing to that growth, namely a stable

political system, an affordable and dynamic workforce, low wage economy,

etc Key sectors of interest include real estate, food and beverage, retail, and

to a lesser extent, manufacturing By 2015, the total value of M&A deals was

US$5.2 million, and in the first seven months of 2016, the figure significantly

climbed to USS8.2 million 2016 and 2017 were recognized as boom years for

M&A in the appearance of billwn-LSD-worth deals, namely Thailand's

Central Group's acquisition of Big C Vietnam for $ 1.14 billion; ‘Thai

Beverage spending US$4.8 billion to acquire Sabeco' s $3% of shares

However, conducting an M&A deal is nol casy, resullig in the fact

that approximately 50% of M&A deals fail An M&A deal is considered to be

successlul when the parlics shall not only achieve their linancial and

commercial goals but also allocate the risks by means of concentrating on all legal aspects My prevailed research question for this Graduation Thesis on

Tegal procedures and foreign restrictions on conducting an M&A in the

Vietnamese laws (“Thesis”) is straightforward: how many steps shall the foreign investors undertake in an M&A transaction and what should they be

aware of Vietnamese legal framework’s restrictions on M&A? When

investors wish to invest into an offshore country, other than potential aspects

in market, the exisling foreign ownership restrictions and conditions

applicable to the foreign investors have been the most significant factors

INTRODUCTION

1 Necessity of the thesis

Since Vietnam joined the WTO and most recently TPP and ASEAN

Economic Community, Merger and Acquisition (“M&A”) market in Vietnam

has witnessed a remarkable change Many investors consider Vietnam to be

an ideal investment destination thanks to the strong annual growth economy, and the underlying factors contributing to that growth, namely a stable

political system, an affordable and dynamic workforce, low wage economy,

etc Key sectors of interest include real estate, food and beverage, retail, and

to a lesser extent, manufacturing By 2015, the total value of M&A deals was

US$5.2 million, and in the first seven months of 2016, the figure significantly

climbed to USS8.2 million 2016 and 2017 were recognized as boom years for

M&A in the appearance of billwn-LSD-worth deals, namely Thailand's

Central Group's acquisition of Big C Vietnam for $ 1.14 billion; ‘Thai

Beverage spending US$4.8 billion to acquire Sabeco' s $3% of shares

However, conducting an M&A deal is nol casy, resullig in the fact

that approximately 50% of M&A deals fail An M&A deal is considered to be

successlul when the parlics shall not only achieve their linancial and

commercial goals but also allocate the risks by means of concentrating on all legal aspects My prevailed research question for this Graduation Thesis on

Tegal procedures and foreign restrictions on conducting an M&A in the

Vietnamese laws (“Thesis”) is straightforward: how many steps shall the foreign investors undertake in an M&A transaction and what should they be

aware of Vietnamese legal framework’s restrictions on M&A? When

investors wish to invest into an offshore country, other than potential aspects

in market, the exisling foreign ownership restrictions and conditions

applicable to the foreign investors have been the most significant factors

- Book “Mergers & acquisitions: A step-by-siep legal and practical

guide”, Edwin T Miller Jr., 2007;

- Mergers & acquisitions from A to Z, Second Edition, Andrew J Sherman and Milledge A Hart, 2006,

nhìn quản trị céng ty”, Assoc Prof., PhD Pham Duy Nghia, School of Law,

Economic University, Ho Chi Mimh City, 2011,

- Article “Mergers and acquisitions in Vietnam pitfalls and

resolutions”, Le Net, Partner al LNT & Partners and Arbitrator al the Vielnam

International Arbitration Centre, 2014;

- Article “As M&As rise, legal issues pose challenge, Dang Duong

Anh, Managing Partner al Vietnam Intemational Law Firm, 2016;

- ‘Ten key M&A legal issues for foreign investors in Vietnam; Linh Bui, Robert Fish and Bill Magennis, Partner of Allens and Linklaters, 2017

The papers and publications mentioned, however, focus principally on

M&A legal issues from a general perspective Innovations in the national

logislation are cvident in the attcmpis of Vietnam Lo comply with the international M&A provisions However, there is not yet a comprehensive

study of Vietnam’s compliance of detailed legal procedures in an M&A

transaction and Victnamesc laws’ restriction Attempting to cover that gap

and aiming to help to attract both foreign and domestic investments in line

with intemnational standards, this Thesis makes an contribution to the field

with an assessment of the “Legal procedures and foreign restrictions on

conducting an M&A transaction in the Vietnamese laws”

3 Research Objective

Vietnam continues to attract foreign investment Apart from via direct

investment, the foreign investors also achieve market access by way of M&A,

ABBREVIATIONS

BOM Board of Management

BRC Business Registration Certificate

DPI Department of Planning and Investment DICA Direct investment capital account

EIAR Environmental impact assessment reports

ERC Enterprise Registration Certificate

Fils Foreign invested enterprises

ICCA Indirect capital contribution account

IRC Investment registration certificate

M&A Morger and Acquisition

MOU Memorandum of understanding

GSM General Shareholders’ Meeting

NRAST National Registration Agency For Secured Transactions

‘Thesis Graduation ‘Thesis on Legal procedures and restrictions

to conduct an M&A transaction by Doreign inveslors in

ihe Vicinamesc laws US$ United States dollar, the lawful currency of the United

States of America R&Ws Representations and Warranties

VCA Vietnam Competition Authority VND Victnamesc Dong, the official currency of Victnam

- Book “Mergers & acquisitions: A step-by-siep legal and practical

guide”, Edwin T Miller Jr., 2007;

- Mergers & acquisitions from A to Z, Second Edition, Andrew J Sherman and Milledge A Hart, 2006,

nhìn quản trị céng ty”, Assoc Prof., PhD Pham Duy Nghia, School of Law,

Economic University, Ho Chi Mimh City, 2011,

- Article “Mergers and acquisitions in Vietnam pitfalls and

resolutions”, Le Net, Partner al LNT & Partners and Arbitrator al the Vielnam

International Arbitration Centre, 2014;

- Article “As M&As rise, legal issues pose challenge, Dang Duong

Anh, Managing Partner al Vietnam Intemational Law Firm, 2016;

- ‘Ten key M&A legal issues for foreign investors in Vietnam; Linh Bui, Robert Fish and Bill Magennis, Partner of Allens and Linklaters, 2017

The papers and publications mentioned, however, focus principally on

M&A legal issues from a general perspective Innovations in the national

logislation are cvident in the attcmpis of Vietnam Lo comply with the international M&A provisions However, there is not yet a comprehensive

study of Vietnam’s compliance of detailed legal procedures in an M&A

transaction and Victnamesc laws’ restriction Attempting to cover that gap

and aiming to help to attract both foreign and domestic investments in line

with intemnational standards, this Thesis makes an contribution to the field

with an assessment of the “Legal procedures and foreign restrictions on

conducting an M&A transaction in the Vietnamese laws”

3 Research Objective

Vietnam continues to attract foreign investment Apart from via direct

investment, the foreign investors also achieve market access by way of M&A,

2.2.3 Restrictions for foreign investors on negotiating the M&A

CHAPTER 3: SOME RECOMMENDATIONS FOR IMPROVING

VIETNAMESE LEGAL FRAMEWORK ON M&A AND FOR

FOREIGN INVESTORS IN AN M&A TRANSACTION - 50

3.1 Improving the legal framework for Mergers and Acquisitions in

3.2 Delermining the valuc of M&A lransactians - 52

ABBREVIATIONS

BOM Board of Management

BRC Business Registration Certificate

DPI Department of Planning and Investment DICA Direct investment capital account

EIAR Environmental impact assessment reports

ERC Enterprise Registration Certificate

Fils Foreign invested enterprises

ICCA Indirect capital contribution account

IRC Investment registration certificate

M&A Morger and Acquisition

MOU Memorandum of understanding

GSM General Shareholders’ Meeting

NRAST National Registration Agency For Secured Transactions

‘Thesis Graduation ‘Thesis on Legal procedures and restrictions

to conduct an M&A transaction by Doreign inveslors in

ihe Vicinamesc laws US$ United States dollar, the lawful currency of the United

States of America R&Ws Representations and Warranties

VCA Vietnam Competition Authority VND Victnamesc Dong, the official currency of Victnam

- Book “Mergers & acquisitions: A step-by-siep legal and practical

guide”, Edwin T Miller Jr., 2007;

- Mergers & acquisitions from A to Z, Second Edition, Andrew J Sherman and Milledge A Hart, 2006,

nhìn quản trị céng ty”, Assoc Prof., PhD Pham Duy Nghia, School of Law,

Economic University, Ho Chi Mimh City, 2011,

- Article “Mergers and acquisitions in Vietnam pitfalls and

resolutions”, Le Net, Partner al LNT & Partners and Arbitrator al the Vielnam

International Arbitration Centre, 2014;

- Article “As M&As rise, legal issues pose challenge, Dang Duong

Anh, Managing Partner al Vietnam Intemational Law Firm, 2016;

- ‘Ten key M&A legal issues for foreign investors in Vietnam; Linh Bui, Robert Fish and Bill Magennis, Partner of Allens and Linklaters, 2017

The papers and publications mentioned, however, focus principally on

M&A legal issues from a general perspective Innovations in the national

logislation are cvident in the attcmpis of Vietnam Lo comply with the international M&A provisions However, there is not yet a comprehensive

study of Vietnam’s compliance of detailed legal procedures in an M&A

transaction and Victnamesc laws’ restriction Attempting to cover that gap

and aiming to help to attract both foreign and domestic investments in line

with intemnational standards, this Thesis makes an contribution to the field

with an assessment of the “Legal procedures and foreign restrictions on

conducting an M&A transaction in the Vietnamese laws”

3 Research Objective

Vietnam continues to attract foreign investment Apart from via direct

investment, the foreign investors also achieve market access by way of M&A,

TABLE OF CONTENTS CERTIFICATE OF AUTHORSHIP/ORIGINALITY

1.1 Definition of Mergers and Acquisitions

1,2 The Differences between Mergers and Acquisitions

1.3 Role of M&A activities

CHAPTER 2: LEGAL PROCEDURES 10 CONDUCT AN M&A

TRANSACTION AND FOREIGN RESTRICTIONS ON M&A IN

2.1.2 Matters to be covered in a legal due diligence 11

2.1.4 Difficulties in conducting legal due diligence in Vietnam 22

2.2 Preparing M&A agrocment and the related Jogal documents 23

2.2.1 Yypical clauses in an M&A agreement

2.2.2 Case study: WOLF Acquires RABBIT

impacling upon deal structures in Viclnam The cost and lime which is

considered to be twa success points in business will be taken into account if”

the investment procedures are diffusive This Thesis hereby may help the

forcign mvestors targeting Vietnamese market choose a method of investment

in the consideration of expenditures and term In addition, legal aspects in the

process of an M&A transaction will be discussed as well in order for the

investors to know exactly what they have to do after having chosen M&A

method

2 Literature Review

M&A in general, steps to carry out an M&A transaction in particular as

well are not unfamiliar issues but how a foreign investor gets through the

foreign resticuions in Vicinamese laws to successfully close Lhe deal still

remains curiosity and needs to be taken into account We can list out the

following articles and researches by both lecturers and lawyers on the

aforesaid iss 10S

- Article “Vietnamese M&A, by the book”, Hoang Anh Nguyen, Pariner at law firm Mayer Brown JSM 2017;

- Article “Choosmg M&A investment to avoid lengthy license of

the foreign investors’, Lawyer Dinh Tien IIoang and Than Thu Thao, 2017:

- Book “The mergers & acquisitions revicw — Edition 11”, Hikaru Oguchi, Taro Hirosawa, Ha Hoang Loc, Partners at Nishimura & Asahi, 2017;

- Article “Some Recommendations of M&A Activity in Viemam

Today”, Phan Quan Viet, Falcuty Business Management, Sai Gon University,

2015,

- Article “Public mergers and acquisitions in Vietnam: overview”,

Oliver Massmamn, Iaane Morris Vietnam LIC, 2017,

TABLE OF CONTENTS CERTIFICATE OF AUTHORSHIP/ORIGINALITY

1.1 Definition of Mergers and Acquisitions

1,2 The Differences between Mergers and Acquisitions

1.3 Role of M&A activities

CHAPTER 2: LEGAL PROCEDURES 10 CONDUCT AN M&A

TRANSACTION AND FOREIGN RESTRICTIONS ON M&A IN

2.1.2 Matters to be covered in a legal due diligence 11

2.1.4 Difficulties in conducting legal due diligence in Vietnam 22

2.2 Preparing M&A agrocment and the related Jogal documents 23

2.2.1 Yypical clauses in an M&A agreement

2.2.2 Case study: WOLF Acquires RABBIT

impacling upon deal structures in Viclnam The cost and lime which is

considered to be twa success points in business will be taken into account if”

the investment procedures are diffusive This Thesis hereby may help the

forcign mvestors targeting Vietnamese market choose a method of investment

in the consideration of expenditures and term In addition, legal aspects in the

process of an M&A transaction will be discussed as well in order for the

investors to know exactly what they have to do after having chosen M&A

method

2 Literature Review

M&A in general, steps to carry out an M&A transaction in particular as

well are not unfamiliar issues but how a foreign investor gets through the

foreign resticuions in Vicinamese laws to successfully close Lhe deal still

remains curiosity and needs to be taken into account We can list out the

following articles and researches by both lecturers and lawyers on the

aforesaid iss 10S

- Article “Vietnamese M&A, by the book”, Hoang Anh Nguyen, Pariner at law firm Mayer Brown JSM 2017;

- Article “Choosmg M&A investment to avoid lengthy license of

the foreign investors’, Lawyer Dinh Tien IIoang and Than Thu Thao, 2017:

- Book “The mergers & acquisitions revicw — Edition 11”, Hikaru Oguchi, Taro Hirosawa, Ha Hoang Loc, Partners at Nishimura & Asahi, 2017;

- Article “Some Recommendations of M&A Activity in Viemam

Today”, Phan Quan Viet, Falcuty Business Management, Sai Gon University,

2015,

- Article “Public mergers and acquisitions in Vietnam: overview”,

Oliver Massmamn, Iaane Morris Vietnam LIC, 2017,

impacling upon deal structures in Viclnam The cost and lime which is

considered to be twa success points in business will be taken into account if”

the investment procedures are diffusive This Thesis hereby may help the

forcign mvestors targeting Vietnamese market choose a method of investment

in the consideration of expenditures and term In addition, legal aspects in the

process of an M&A transaction will be discussed as well in order for the

investors to know exactly what they have to do after having chosen M&A

method

2 Literature Review

M&A in general, steps to carry out an M&A transaction in particular as

well are not unfamiliar issues but how a foreign investor gets through the

foreign resticuions in Vicinamese laws to successfully close Lhe deal still

remains curiosity and needs to be taken into account We can list out the

following articles and researches by both lecturers and lawyers on the

aforesaid iss 10S

- Article “Vietnamese M&A, by the book”, Hoang Anh Nguyen, Pariner at law firm Mayer Brown JSM 2017;

- Article “Choosmg M&A investment to avoid lengthy license of

the foreign investors’, Lawyer Dinh Tien IIoang and Than Thu Thao, 2017:

- Book “The mergers & acquisitions revicw — Edition 11”, Hikaru Oguchi, Taro Hirosawa, Ha Hoang Loc, Partners at Nishimura & Asahi, 2017;

- Article “Some Recommendations of M&A Activity in Viemam

Today”, Phan Quan Viet, Falcuty Business Management, Sai Gon University,

2015,

- Article “Public mergers and acquisitions in Vietnam: overview”,

Oliver Massmamn, Iaane Morris Vietnam LIC, 2017,

- Book “Mergers & acquisitions: A step-by-siep legal and practical

guide”, Edwin T Miller Jr., 2007;

- Mergers & acquisitions from A to Z, Second Edition, Andrew J Sherman and Milledge A Hart, 2006,

nhìn quản trị céng ty”, Assoc Prof., PhD Pham Duy Nghia, School of Law,

Economic University, Ho Chi Mimh City, 2011,

- Article “Mergers and acquisitions in Vietnam pitfalls and

resolutions”, Le Net, Partner al LNT & Partners and Arbitrator al the Vielnam

International Arbitration Centre, 2014;

- Article “As M&As rise, legal issues pose challenge, Dang Duong

Anh, Managing Partner al Vietnam Intemational Law Firm, 2016;

- ‘Ten key M&A legal issues for foreign investors in Vietnam; Linh Bui, Robert Fish and Bill Magennis, Partner of Allens and Linklaters, 2017

The papers and publications mentioned, however, focus principally on

M&A legal issues from a general perspective Innovations in the national

logislation are cvident in the attcmpis of Vietnam Lo comply with the international M&A provisions However, there is not yet a comprehensive

study of Vietnam’s compliance of detailed legal procedures in an M&A

transaction and Victnamesc laws’ restriction Attempting to cover that gap

and aiming to help to attract both foreign and domestic investments in line

with intemnational standards, this Thesis makes an contribution to the field

with an assessment of the “Legal procedures and foreign restrictions on

conducting an M&A transaction in the Vietnamese laws”

3 Research Objective

Vietnam continues to attract foreign investment Apart from via direct

investment, the foreign investors also achieve market access by way of M&A,

- Book “Mergers & acquisitions: A step-by-siep legal and practical

guide”, Edwin T Miller Jr., 2007;

- Mergers & acquisitions from A to Z, Second Edition, Andrew J Sherman and Milledge A Hart, 2006,

nhìn quản trị céng ty”, Assoc Prof., PhD Pham Duy Nghia, School of Law,

Economic University, Ho Chi Mimh City, 2011,

- Article “Mergers and acquisitions in Vietnam pitfalls and

resolutions”, Le Net, Partner al LNT & Partners and Arbitrator al the Vielnam

International Arbitration Centre, 2014;

- Article “As M&As rise, legal issues pose challenge, Dang Duong

Anh, Managing Partner al Vietnam Intemational Law Firm, 2016;

- ‘Ten key M&A legal issues for foreign investors in Vietnam; Linh Bui, Robert Fish and Bill Magennis, Partner of Allens and Linklaters, 2017

The papers and publications mentioned, however, focus principally on

M&A legal issues from a general perspective Innovations in the national

logislation are cvident in the attcmpis of Vietnam Lo comply with the international M&A provisions However, there is not yet a comprehensive

study of Vietnam’s compliance of detailed legal procedures in an M&A

transaction and Victnamesc laws’ restriction Attempting to cover that gap

and aiming to help to attract both foreign and domestic investments in line

with intemnational standards, this Thesis makes an contribution to the field

with an assessment of the “Legal procedures and foreign restrictions on

conducting an M&A transaction in the Vietnamese laws”

3 Research Objective

Vietnam continues to attract foreign investment Apart from via direct

investment, the foreign investors also achieve market access by way of M&A,

- Book “Mergers & acquisitions: A step-by-siep legal and practical

guide”, Edwin T Miller Jr., 2007;

- Mergers & acquisitions from A to Z, Second Edition, Andrew J Sherman and Milledge A Hart, 2006,

nhìn quản trị céng ty”, Assoc Prof., PhD Pham Duy Nghia, School of Law,

Economic University, Ho Chi Mimh City, 2011,

- Article “Mergers and acquisitions in Vietnam pitfalls and

resolutions”, Le Net, Partner al LNT & Partners and Arbitrator al the Vielnam

International Arbitration Centre, 2014;

- Article “As M&As rise, legal issues pose challenge, Dang Duong

Anh, Managing Partner al Vietnam Intemational Law Firm, 2016;

- ‘Ten key M&A legal issues for foreign investors in Vietnam; Linh Bui, Robert Fish and Bill Magennis, Partner of Allens and Linklaters, 2017

The papers and publications mentioned, however, focus principally on

M&A legal issues from a general perspective Innovations in the national

logislation are cvident in the attcmpis of Vietnam Lo comply with the international M&A provisions However, there is not yet a comprehensive

study of Vietnam’s compliance of detailed legal procedures in an M&A

transaction and Victnamesc laws’ restriction Attempting to cover that gap

and aiming to help to attract both foreign and domestic investments in line

with intemnational standards, this Thesis makes an contribution to the field

with an assessment of the “Legal procedures and foreign restrictions on

conducting an M&A transaction in the Vietnamese laws”

3 Research Objective

Vietnam continues to attract foreign investment Apart from via direct

investment, the foreign investors also achieve market access by way of M&A,

TABLE OF CONTENTS CERTIFICATE OF AUTHORSHIP/ORIGINALITY

1.1 Definition of Mergers and Acquisitions

1,2 The Differences between Mergers and Acquisitions

1.3 Role of M&A activities

CHAPTER 2: LEGAL PROCEDURES 10 CONDUCT AN M&A

TRANSACTION AND FOREIGN RESTRICTIONS ON M&A IN

2.1.2 Matters to be covered in a legal due diligence 11

2.1.4 Difficulties in conducting legal due diligence in Vietnam 22

2.2 Preparing M&A agrocment and the related Jogal documents 23

2.2.1 Yypical clauses in an M&A agreement

2.2.2 Case study: WOLF Acquires RABBIT

INTRODUCTION

1 Necessity of the thesis

Since Vietnam joined the WTO and most recently TPP and ASEAN

Economic Community, Merger and Acquisition (“M&A”) market in Vietnam

has witnessed a remarkable change Many investors consider Vietnam to be

an ideal investment destination thanks to the strong annual growth economy, and the underlying factors contributing to that growth, namely a stable

political system, an affordable and dynamic workforce, low wage economy,

etc Key sectors of interest include real estate, food and beverage, retail, and

to a lesser extent, manufacturing By 2015, the total value of M&A deals was

US$5.2 million, and in the first seven months of 2016, the figure significantly

climbed to USS8.2 million 2016 and 2017 were recognized as boom years for

M&A in the appearance of billwn-LSD-worth deals, namely Thailand's

Central Group's acquisition of Big C Vietnam for $ 1.14 billion; ‘Thai

Beverage spending US$4.8 billion to acquire Sabeco' s $3% of shares

However, conducting an M&A deal is nol casy, resullig in the fact

that approximately 50% of M&A deals fail An M&A deal is considered to be

successlul when the parlics shall not only achieve their linancial and

commercial goals but also allocate the risks by means of concentrating on all legal aspects My prevailed research question for this Graduation Thesis on

Tegal procedures and foreign restrictions on conducting an M&A in the

Vietnamese laws (“Thesis”) is straightforward: how many steps shall the foreign investors undertake in an M&A transaction and what should they be

aware of Vietnamese legal framework’s restrictions on M&A? When

investors wish to invest into an offshore country, other than potential aspects

in market, the exisling foreign ownership restrictions and conditions

applicable to the foreign investors have been the most significant factors

ABBREVIATIONS

BOM Board of Management

BRC Business Registration Certificate

DPI Department of Planning and Investment DICA Direct investment capital account

EIAR Environmental impact assessment reports

ERC Enterprise Registration Certificate

Fils Foreign invested enterprises

ICCA Indirect capital contribution account

IRC Investment registration certificate

M&A Morger and Acquisition

MOU Memorandum of understanding

GSM General Shareholders’ Meeting

NRAST National Registration Agency For Secured Transactions

‘Thesis Graduation ‘Thesis on Legal procedures and restrictions

to conduct an M&A transaction by Doreign inveslors in

ihe Vicinamesc laws US$ United States dollar, the lawful currency of the United

States of America R&Ws Representations and Warranties

VCA Vietnam Competition Authority VND Victnamesc Dong, the official currency of Victnam

2.2.3 Restrictions for foreign investors on negotiating the M&A

CHAPTER 3: SOME RECOMMENDATIONS FOR IMPROVING

VIETNAMESE LEGAL FRAMEWORK ON M&A AND FOR

FOREIGN INVESTORS IN AN M&A TRANSACTION - 50

3.1 Improving the legal framework for Mergers and Acquisitions in

3.2 Delermining the valuc of M&A lransactians - 52

ACKNOWLEDGEMENT

In working through this Thesis, I would like to express my sincere

gratitude to PhD Phan ‘hi Thanh ‘Thuy, who has given me invaluable instruction

I greatly approcialc Department of Business Law, School of Law,

Vietnam National University for facilitating my thesis

‘My greatest (hanks also go to my family, my supervisors at Violnam

International Law Firm (VILAF Hong Duc) and my dearest friends, who

always stand by and support me

ABBREVIATIONS

BOM Board of Management

BRC Business Registration Certificate

DPI Department of Planning and Investment DICA Direct investment capital account

EIAR Environmental impact assessment reports

ERC Enterprise Registration Certificate

Fils Foreign invested enterprises

ICCA Indirect capital contribution account

IRC Investment registration certificate

M&A Morger and Acquisition

MOU Memorandum of understanding

GSM General Shareholders’ Meeting

NRAST National Registration Agency For Secured Transactions

‘Thesis Graduation ‘Thesis on Legal procedures and restrictions

to conduct an M&A transaction by Doreign inveslors in

ihe Vicinamesc laws US$ United States dollar, the lawful currency of the United

States of America R&Ws Representations and Warranties

VCA Vietnam Competition Authority VND Victnamesc Dong, the official currency of Victnam

2.2.3 Restrictions for foreign investors on negotiating the M&A

CHAPTER 3: SOME RECOMMENDATIONS FOR IMPROVING

VIETNAMESE LEGAL FRAMEWORK ON M&A AND FOR

FOREIGN INVESTORS IN AN M&A TRANSACTION - 50

3.1 Improving the legal framework for Mergers and Acquisitions in

3.2 Delermining the valuc of M&A lransactians - 52

INTRODUCTION

1 Necessity of the thesis

Since Vietnam joined the WTO and most recently TPP and ASEAN

Economic Community, Merger and Acquisition (“M&A”) market in Vietnam

has witnessed a remarkable change Many investors consider Vietnam to be

an ideal investment destination thanks to the strong annual growth economy, and the underlying factors contributing to that growth, namely a stable

political system, an affordable and dynamic workforce, low wage economy,

etc Key sectors of interest include real estate, food and beverage, retail, and

to a lesser extent, manufacturing By 2015, the total value of M&A deals was

US$5.2 million, and in the first seven months of 2016, the figure significantly

climbed to USS8.2 million 2016 and 2017 were recognized as boom years for

M&A in the appearance of billwn-LSD-worth deals, namely Thailand's

Central Group's acquisition of Big C Vietnam for $ 1.14 billion; ‘Thai

Beverage spending US$4.8 billion to acquire Sabeco' s $3% of shares

However, conducting an M&A deal is nol casy, resullig in the fact

that approximately 50% of M&A deals fail An M&A deal is considered to be

successlul when the parlics shall not only achieve their linancial and

commercial goals but also allocate the risks by means of concentrating on all legal aspects My prevailed research question for this Graduation Thesis on

Tegal procedures and foreign restrictions on conducting an M&A in the

Vietnamese laws (“Thesis”) is straightforward: how many steps shall the foreign investors undertake in an M&A transaction and what should they be

aware of Vietnamese legal framework’s restrictions on M&A? When

investors wish to invest into an offshore country, other than potential aspects

in market, the exisling foreign ownership restrictions and conditions

applicable to the foreign investors have been the most significant factors

2.2.3 Restrictions for foreign investors on negotiating the M&A

CHAPTER 3: SOME RECOMMENDATIONS FOR IMPROVING

VIETNAMESE LEGAL FRAMEWORK ON M&A AND FOR

FOREIGN INVESTORS IN AN M&A TRANSACTION - 50

3.1 Improving the legal framework for Mergers and Acquisitions in

3.2 Delermining the valuc of M&A lransactians - 52

ACKNOWLEDGEMENT

In working through this Thesis, I would like to express my sincere

gratitude to PhD Phan ‘hi Thanh ‘Thuy, who has given me invaluable instruction

I greatly approcialc Department of Business Law, School of Law,

Vietnam National University for facilitating my thesis

‘My greatest (hanks also go to my family, my supervisors at Violnam

International Law Firm (VILAF Hong Duc) and my dearest friends, who

always stand by and support me

- Book “Mergers & acquisitions: A step-by-siep legal and practical

guide”, Edwin T Miller Jr., 2007;

- Mergers & acquisitions from A to Z, Second Edition, Andrew J Sherman and Milledge A Hart, 2006,

nhìn quản trị céng ty”, Assoc Prof., PhD Pham Duy Nghia, School of Law,

Economic University, Ho Chi Mimh City, 2011,

- Article “Mergers and acquisitions in Vietnam pitfalls and

resolutions”, Le Net, Partner al LNT & Partners and Arbitrator al the Vielnam

International Arbitration Centre, 2014;

- Article “As M&As rise, legal issues pose challenge, Dang Duong

Anh, Managing Partner al Vietnam Intemational Law Firm, 2016;

- ‘Ten key M&A legal issues for foreign investors in Vietnam; Linh Bui, Robert Fish and Bill Magennis, Partner of Allens and Linklaters, 2017

The papers and publications mentioned, however, focus principally on

M&A legal issues from a general perspective Innovations in the national

logislation are cvident in the attcmpis of Vietnam Lo comply with the international M&A provisions However, there is not yet a comprehensive

study of Vietnam’s compliance of detailed legal procedures in an M&A

transaction and Victnamesc laws’ restriction Attempting to cover that gap

and aiming to help to attract both foreign and domestic investments in line

with intemnational standards, this Thesis makes an contribution to the field

with an assessment of the “Legal procedures and foreign restrictions on

conducting an M&A transaction in the Vietnamese laws”

3 Research Objective

Vietnam continues to attract foreign investment Apart from via direct

investment, the foreign investors also achieve market access by way of M&A,

INTRODUCTION

1 Necessity of the thesis

Since Vietnam joined the WTO and most recently TPP and ASEAN

Economic Community, Merger and Acquisition (“M&A”) market in Vietnam

has witnessed a remarkable change Many investors consider Vietnam to be

an ideal investment destination thanks to the strong annual growth economy, and the underlying factors contributing to that growth, namely a stable

political system, an affordable and dynamic workforce, low wage economy,

etc Key sectors of interest include real estate, food and beverage, retail, and

to a lesser extent, manufacturing By 2015, the total value of M&A deals was

US$5.2 million, and in the first seven months of 2016, the figure significantly

climbed to USS8.2 million 2016 and 2017 were recognized as boom years for

M&A in the appearance of billwn-LSD-worth deals, namely Thailand's

Central Group's acquisition of Big C Vietnam for $ 1.14 billion; ‘Thai

Beverage spending US$4.8 billion to acquire Sabeco' s $3% of shares

However, conducting an M&A deal is nol casy, resullig in the fact

that approximately 50% of M&A deals fail An M&A deal is considered to be

successlul when the parlics shall not only achieve their linancial and

commercial goals but also allocate the risks by means of concentrating on all legal aspects My prevailed research question for this Graduation Thesis on

Tegal procedures and foreign restrictions on conducting an M&A in the

Vietnamese laws (“Thesis”) is straightforward: how many steps shall the foreign investors undertake in an M&A transaction and what should they be

aware of Vietnamese legal framework’s restrictions on M&A? When

investors wish to invest into an offshore country, other than potential aspects

in market, the exisling foreign ownership restrictions and conditions

applicable to the foreign investors have been the most significant factors

TABLE OF CONTENTS CERTIFICATE OF AUTHORSHIP/ORIGINALITY

1.1 Definition of Mergers and Acquisitions

1,2 The Differences between Mergers and Acquisitions

1.3 Role of M&A activities

CHAPTER 2: LEGAL PROCEDURES 10 CONDUCT AN M&A

TRANSACTION AND FOREIGN RESTRICTIONS ON M&A IN

2.1.2 Matters to be covered in a legal due diligence 11

2.1.4 Difficulties in conducting legal due diligence in Vietnam 22

2.2 Preparing M&A agrocment and the related Jogal documents 23

2.2.1 Yypical clauses in an M&A agreement

2.2.2 Case study: WOLF Acquires RABBIT

TABLE OF CONTENTS CERTIFICATE OF AUTHORSHIP/ORIGINALITY

1.1 Definition of Mergers and Acquisitions

1,2 The Differences between Mergers and Acquisitions

1.3 Role of M&A activities

CHAPTER 2: LEGAL PROCEDURES 10 CONDUCT AN M&A

TRANSACTION AND FOREIGN RESTRICTIONS ON M&A IN

2.1.2 Matters to be covered in a legal due diligence 11

2.1.4 Difficulties in conducting legal due diligence in Vietnam 22

2.2 Preparing M&A agrocment and the related Jogal documents 23

2.2.1 Yypical clauses in an M&A agreement

2.2.2 Case study: WOLF Acquires RABBIT

TABLE OF CONTENTS CERTIFICATE OF AUTHORSHIP/ORIGINALITY

1.1 Definition of Mergers and Acquisitions

1,2 The Differences between Mergers and Acquisitions

1.3 Role of M&A activities

CHAPTER 2: LEGAL PROCEDURES 10 CONDUCT AN M&A

TRANSACTION AND FOREIGN RESTRICTIONS ON M&A IN

2.1.2 Matters to be covered in a legal due diligence 11

2.1.4 Difficulties in conducting legal due diligence in Vietnam 22

2.2 Preparing M&A agrocment and the related Jogal documents 23

2.2.1 Yypical clauses in an M&A agreement

2.2.2 Case study: WOLF Acquires RABBIT