Doing Business

Billions Pour into Vietnamese Businesses: Which US Corporation Leads the Investment Race?

Trường Lăng

September 13, 2023

Doing Business

Billions Pour into Vietnamese Businesses: Which US Corporation Leads the Investment Race?

Trường Lăng

September 13, 2023

Many large US corporations invest billions of dollars in Vietnam as the Vietnamese economy develops rapidly and becomes a destination for investors.

Data from the Foreign Investment Agency (Ministry of Planning and Investment) shows that by the end of 2022, US businesses have invested in 1,216 projects in Vietnam, with a total investment capital of 11.4 billion USD. The United States ranks 11th among the countries and territories investing the most in Vietnam.

Billions of dollars invested in real estate and tourism companies

Warburg Pincus is not an unfamiliar name to Vietnamese investors. This is the US investment fund that Prime Minister Pham Minh Chinh worked with during his visit to the US in May 2022. 

(Prime Minister Pham Minh Chinh received Mr. Charles Kaye, Global CEO of Warburg Pincus Investment Fund (USA) – Photo: VGP/Nhat Bac)

Warburg Pincus is a fund recognized for making investments worth hundreds of millions of dollars each time. Billions of dollars have been invested overall in a number of Vietnam’s top companies.

With its headquarters in New York, this private investment fund is among the oldest and biggest in the world. After China and India, Vietnam is Warburg Pincus’ third largest investment destination in Asia.

In June 2022, the investment fund group led by Warburg Pincus completed a deal worth 250 million USD into Novaland. This investment affirms Warburg Pincus’s long-term investment strategy in Vietnam as the largest private investment fund with more than 1.5 billion USD disbursed and expands the list of leading enterprises in Vietnam that Warburg Pincus has been accompanying.

This sum of money assists Novaland build out its strategic land fund and finish developing ongoing important projects. 

The transaction with Novaland marks Warburg Pincus’s 6th investment in Vietnam. 

2013 saw the completion of Warburg Pincus’ first significant business transaction in Vietnam when this corporation invested 200 million USD to acquire 20% of Vincom Retail (VRE) shares from billionaire Pham Nhat Vuong.

Following that, Warburg Pincus also invested 300 million USD with VinaCapital in 2016. Warburg Pincus and VinaCapital reached an agreement to establish a joint venture specializing in hotel investment and management in Vietnam, with plans to progressively expand throughout Southeast Asia.

Later, this joint venture made investments, including buying all the shares in Serenity Holding, a hotel management company that oversees the brands namely Fusion Resorts, Fusion Suites, Alma Resorts, and À La Carte Living.

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Many American corporations promote investment in Vietnam.

This joint venture also bought 50% of the shares of Metropole Hanoi Hotel and 100% of Ho Tram Project Company’s capital, the owner of The Grand Ho Tram project in Ba Ria Vung Tau. At the same time, industrial real estate worth up to hundreds of millions of dollars has been built through the joint venture with Becamex IDC.

Early in 2018, Warburg Pincus reported two independent legal investors managed by this firm had invested more than 370 million USD (about 8,400 billion VND) in billionaire Ho Hung Anh’s Techcombank.

After that, the fund continued to invest in MoMo, a financial technology platform through two capital calls, Series C and Series D, with an undisclosed amount of capital. MoMo recently revealed that its value has surpassed $2 billion, making it one of Vietnam’s tech unicorns.

The CEO and Head of Real Estate for the Asia Pacific Region at Warburg Pincus, Jeffrey Perlman, stated during the capital investment in Novaland that Warburg Pincus strongly believes in the long-term growth trajectory of the Vietnamese economy and continues to actively pursue new opportunities to invest in leading platforms in Vietnam.

With the investment deal in Techcombank, representatives of Warburg Pincus also set expectations for Vietnam’s long-term growth. Accordingly, Vietnam is one of the countries with the fastest growing banking market in Southeast Asia.

Many Vietnamese companies are anticipated by Warburg Pincus to rise to prominence in the region.

Technology and retail 

The US investment fund management company KKR also had a very early presence in Vietnam. With up to 370 billion USD in managed assets, this is one of the biggest investment firms in the world.

Since 2011, KKR has invested 159 million USD as a major shareholder in Masan Consumer, a division of the Masan Group owned by billionaire Nguyen Dang Quang. KKR continued to invest an additional $200 million in 2013, bringing its ownership percentage to 18.04%. 

In the field of technology, Mr. Truong Gia Binh’s FPT Group and Synnex Technology International Corporation (Synnex), the third-largest company in the world for distributing technology products, telecommunications, and electronic components with its headquarters in California, USA, entered into an investment cooperation agreement in 2017.

(Synnex FPT receives the award for ‘Best Growth Distributor of 2021’)

Midway through 2015, US giant Mondelez International spent approximately 8,000 billion VND to acquire 80% of Kinh Do Group’s (KDC) holdings in the confectionery industry. Mondelez International is regarded as the top snack food company in the world, with about $30 billion in revenue and more than 107,000 employees worldwide in 2015. 

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GE Group’s smart factory in Hai Phong City (Photo by Industry and Trade Magazine)

In terms of FDI, US investment capital in Vietnam has increased over the past few years. With 91 new projects, the US invested 748 million USD in Vietnam in 2022. Cumulative US investment capital in Vietnam has reached more than 11 billion USD. On the list of nations investing the most in Vietnam, the US is now ranked eleventh.

A historically sizable American corporate delegation arrived in Vietnam at the end of March 2023.

Many familiar corporations are doing business or manufacturing in Vietnam and have expansion plans such as Apple, Coca-Cola and PepsiCo, Netflix… SpaceX is also looking for the satellite Internet service market in Vietnam and countries in the region.

The quest for commercial prospects in Vietnam is intensified by Pfizer and Johnson & Johnson, medical device producer Abbott, Visa Finance Company, Citibank, cloud computing technology companies Meta, and Amazon Web Services.

Recently, certain US companies  have shown an interest in the energy industry in Vietnam. A spokesman of the top US energy company AES stated in March 2023 that energy remains a crucial strategic area of cooperation between the US and Vietnam. Progress in large-scale energy projects by AES and other member companies will contribute to promoting Vietnam’s development.

Before, at the end of 2020, the US company GE proposed to Lang Son province authority to approve research and survey for the projects for the Chi Lang Wind Power Plant, with a total expected capacity of 165 MW, and the Ai Quoc Wind Power Plant, with a total expected capacity of 253 MW, and a total investment of more than 710 million USD.

Conclusion

There is no doubt that Vietnam-US relations are at the best stage since the end of the Vietnam War. Vietnam is the only Southeast Asian country in the top 10 of U.S. trading partners, and American manufacturers increasingly consider Vietnam as an alternative destination to China. Many US corporations have eyed Vietnam as one of the most attractive investment destinations.

Thus, it is an ideal time for the US investors to seize the opportunities! Reach out to us if you need support with setting up a company in Vietnam. With our specialized knowledge and experience in Vietnam and global markets, as well as legal procedures across diverse majors and sectors, we will walk you through the challenges. Don’t miss your chance to be part of this transformative journey. Take action now and explore the possibilities of doing business and investing in Vietnam.  

Source: Vietnam.net

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