简报
Merger filing in Vietnam in 2022
On 3 October 2022, the Vietnam Competition and Consumer Authority (the VCCA) published on the VCCA’s website (here) a report on merger control in Vietnamese.
According to this report, the VCCA received 62 notification files from parties during the first six months of 2022, which is roughly half of the number received in the entire year 2021.
- Transaction forms: More than 80% of the notified transaction were acquisitions (with the rest being mergers and joint ventures).
- Areas: 63% of the notified transactions took place within the territory of Vietnam, while 37% were carried out offshore between foreign enterprises with a commercial presence in Vietnam.
- Participating enterprises: 202 in total, 59.41% being domestic enterprises and 40.59% being foreign enterprises established and operating outside of Vietnam. The proportion of foreign enterprises in the first half of 2022 is significantly higher than it was in 2021 (24.93%).
- Sectors: The leading sectors include the service industry (insurance, aviation, medical examination and treatment, retail, logistics, e-commerce, accommodation, shopping malls), energy, real estate, with some filings also in the medical, pharmaceutical, education, petroleum, garment, and mineral sectors.
- Regulatory thresholds: Most of the notified transactions (92%) exceeded the regulatory thresholds for total revenue and total assets. The others might reach the thresholds for transaction value and combined market share, among which one transaction in respect of sea transportation is subject to official review as its market share exceeded 20% and potentially adversely impacted competition in the market.
The VCCA’s annual report 2022 is expected to be released in the first quarter of this year 2023 and may provide a clearer picture of merger control for the entire year 2022.
Anticipated establishment of the National Competition Committee
The National Competition Committee (the NCC) was introduced (in concept) in the Law on Competition 2018. On 29 November 2022, the Vietnamese Government issued Decree 96 on the organizational structure of the Ministry of Industry and Trade (the MOIT), recognizing the NCC as a sub-unit of the MOIT and confirming that the MOIT submitted to the Government a draft decree on the organizational structure and functions of the NCC. The NCC is thus expected to be established in the near future.
Until the NCC is established, the VCCA has overseen competition related matters, including merger control. However, there is no public record of any case involving violations of merger control regulations and subsequent fines. Once established, the NCC is expected to exercise its authority more actively. For instance,
- The NCC may review merger filing dossiers more stringently, particularly the economic aspects of transactions, including demanding more precise information and/or more detailed insights and explanations on the goods or services supplied in Vietnam, as well as credible sources of market share information.
- The NCC may actively review compliance with post-notification conditions. For conditional economic concentrations subject to Article 42 of the Law on Competition, the MOIT has previously issued recommendations that are not binding on the parties. Once established, the NCC is expected to be more vigilant in monitoring post-notification compliance.
International cooperation between the NCC and foreign anti-trust authorities under the Law on Competition is also expected to facilitate the monitoring process of the NCC.
Due to the likelihood of more stringent monitoring and the number of transactions notified, we expect that there may be some measures to expedite the review process, even though it remains unclear how and when they will be implemented:
- Filing through an online system.
- Fast-track review applicable to “no issue” transactions, such as intra-group restructurings.
- Consolidated full guidelines on merger filings and market databases, which may assist parties to gain a comprehensive understanding of the merger control regime and prepare a detailed market share report. The VCCA (with the support of JICA Project) has already developed research reports on competition in the automotive industry market and the industrial real estate market.
Finally, we understand that there will be administrative difficulties (i) in the filings already submitted to and processed by the VCCA and subsequently handled by the NCC, (ii) in processing filings while waiting for official guidelines regarding the procedure for working with the NCC (instead of with the VCCA), and (iii) until the NCC functions in both administration and legal proceedings, and related personnel, have been established. We trust that such issues will be handled by transitional provisions in the decree on the organizational structure and functions of the NCC but the devil is always in the detail.
