Thailand-based Indorama acquires Vietnam bottle maker to bolster its Asian production base

, Thailand-based Indorama acquires Vietnam bottle maker to bolster its Asian production base

The Mergers and Acquisitions (M&A) market in Vietnam has been going through a downturn due to the pandemic, according to Sophie Dao, Partner at GBS – Global Business Services LLC, one of the best M&A consulting firms in Vietnam.

Thai plastics producer Indorama to buy Vietnam bottle maker Ngoc Nghia. The acquisition would expand presence in fast-growing market, the Nikkei reported.

Thailand’s Indorama Ventures, the leading producer of a key resin in plastic bottles, plans to acquire a major Vietnamese manufacturer of plastic packaging, aiming to bolster its Asian production base to meet surging demand.

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The Thai petrochemical company is making a tender offer for all outstanding shares of Ngoc Nghia Industry-Service-Trading, expecting to pay up to 3.09 billion baht ($92.5 million), according to a stock market filing this week. The deal is expected to be completed as early as the first half of this year.

Ngoc Nghia operates four factories in Vietnam, producing one-third of the country’s plastic bottles, the company says. It is registered on Vietnam’s Unlisted Public Company Market.

According to the Nikkei, Indorama is the world’s top manufacturer of polyethylene terephthalate resin, better known as PET. The company seeks to expand market share in regions such as Asia and Africa where demand is rising.

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“The PET packaging market in Vietnam is expected to grow steadily, due to increasing consumption and rising living standards,” said Dilip Kumar Agarwal, CEO of Indorama’s PET business. “This acquisition opportunity will promote the growth of combined PET, our largest group of businesses.”

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“M&A are likely to continue to play a key role in Vietnam’s economy in 2022. While M&A activities were disrupted due to the pandemic in 2020”, Sophie Dao told Vietnam Insider.

Domestic firms have led the M&A market. The government has also eased some requirements in the investment and enterprise laws to facilitate M&A deals. As Vietnam hopes to recover its economy, further robust M&A activities can be expected in 2022.

With a vibrant economic climate, Vietnam remains a strong candidate for investment from the Association of Southeast Asian Nations and beyond.

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