Vietnam's mergers and acquisitions (M&A) market is poised for a significant rebound in 2026, driven by policy reforms, strategic infrastructure investments, and an improving regulatory environment. While the market experienced a slowdown in 2025, recent activity and expert forecasts point to a strong recovery, with capital flows expected to intensify.

A notable transaction in early December saw Japan's Kokuyo Group announce an investment of 27.6 billion yen to acquire over 65% of Thien Long, Vietnam's "ballpoint pen king". Speaking at the Vietnam M&A Forum 2025 on the afternoon of 9/12, Tamotsu Majima, senior director at RECOF, highlighted this as a pivotal move in Kokuyo's strategy to become the "king" of stationery in Southeast Asia by 2030.

This deal has reignited market attention in Vietnam's M&A sector after a period of relative quiet. According to a KPMG Vietnam report, the market recorded 218 M&A deals in the first 10 months of 2025, totaling USD 2.3 billion. This figure is less than half of the market's size last year, which exceeded USD 4.7 billion. This trend aligns with broader M&A activity in Southeast Asia, which has faced challenges such as tight financial markets, valuation expectation gaps, and geopolitical-legal risks.

Experts anticipate a more dynamic M&A market in 2026. Khanh Vu, chief executive officer of VinaCapital Vietnam Opportunity Fund, noted that most M&A transaction volumes were recorded in the second half of 2025, indicating the market is entering a more stable phase. "We observe existing investors returning to pursue new deals, while new players are also entering the market," he stated. Vu predicts M&A activity will enter a robust cycle, fueled by policy drivers like Resolution 68 on private economic development and a series of institutional reforms and strategic infrastructure investments.

KPMG forecasts several large deals, valued at USD 1-1.5 billion, are nearing completion. These are expected to provide a new impetus over the next two years.

Khanh Vu, chief executive officer of VinaCapital Vietnam Opportunity Fund, at the forum on the afternoon of 9/12. Photo: Finance - Investment

For Japanese businesses, Tamotsu Majima highlighted Vietnam as a prominent growth country in the region, boasting numerous free trade agreements (FTAs) and strategic partnerships, offering significant room for expansion. "Vietnam has about 2,000 Japanese companies operating, which is one-third of the number in Thailand, so there are still many opportunities," he explained.

Experts identified several driving factors, including addressing bottlenecks in Land Law implementation, streamlining investment procedures, enhancing bond market transparency, and expanding the direct power purchase agreement (DPPA) mechanism for renewable energy. Concurrently, the ongoing shift in global supply chains continues to attract capital into materials, industry, and export manufacturing sectors.

The upgrade of Vietnam's stock market by FTSE Russell to "secondary emerging" status is also a positive contributor. Dinh The Anh, head of corporate finance at KPMG, noted that the ability to divest has long been an investor concern. "Completing the upgrade is expected to make the stock market an efficient divestment channel (via IPOs) for investors. M&A activity in 2026 will be better," he said.

Experts believe the 2026 market will favor buyers, feature cautious valuations, incorporate more risk-sharing structures, and demand more thorough due diligence. Vo Ha Duyen, chairwoman of VILAF Law Firm, stated that investors still seek policy predictability and practicality. They also hope for improvements in approval and control processes, as well as divestment mechanisms.

Regarding attractive sectors, Hugo Virag, managing director and co-head of Southeast Asia at Astris Finance, suggested that energy and infrastructure, particularly digital infrastructure, will be boosted by macroeconomic factors and climate change pressures. Douglas Jackson of Alvarez & Marsal Vietnam sees industrial real estate and data centers continuing as appealing sectors with potential to attract M&A capital flows. Retail and healthcare maintain their appeal, while financial services are expected to recover in line with market cycles.

Deputy Minister of Finance Tran Quoc Phuong affirmed that foreign investors view Vietnam's M&A market as safe, attractive, and promising. In the first 11 months of 2025, foreign direct investment (FDI) through capital contribution and share purchases exceeded USD 6.1 billion, marking a 50.7% increase compared to the same period in 2024. "The strong increase in investment capital through capital contributions and share purchases indicates a rebound in Vietnam's M&A market this year, even if this is only a perspective from international investment flows," Phuong observed.

He added that the Ministry of Finance is developing two proposals: one on developing foreign-invested economies, and another on attracting new-generation foreign investment, both with directives for open and superior institutional frameworks and policies. Coupled with efforts to amend land, planning, and tax laws, Deputy Minister Phuong anticipates a continued improvement in the investment and business environment, fostering high-quality investment flows into Vietnam.

Vien Thong