VIETNAM TRAINING WORKSHOP ON M&A EVALUATION SKILLS FOR COMPETITION AUTHORITY OFFICIALS Ha Long Bay, Vietnam, 13 & 14 August 2005
M&A TRAINING • TOPIC. • ‘CO OPERATION & CO ORDINATION WITH THIRD PARTIES, OTHER STATE AGENCIES OR COMPETITION AUTHORITIES IN OTHER COUNTRIES” PRESENTED BY, HANK SPIER, SPIER CONSULTING , AUSTRALIA.
M & A TRAINING • Merger analysis needs timely information. • In most jurisdictions there are time limits, in Vietnam 60 days. • Information has to be up to date and practical, not simply theory. • Merger regulators need assistance from others. • The initial information comes from the merging parties but more is usually needed . • Further information from the parties needs to be checked with others.
M & A TRAINING • Under Vietnamese merger law the essential issues are, • 1.The market. • 2.The concentration level in the market. • 3. Do any exemptions apply?
M & A TRAINING • The market. • 1. What is the product, what are its substitutes. • 2. Are we looking at product , geographical or functional markets? • 3.What is likely to be the answer to (1) and ( 2 ) over the coming years?
M & A TRAINING • Markets – information sources. • The parties • The market place- competitors, suppliers, customers. • Studies done by other Government bodies. • Studies done by any non Government bodies such as Universities. • Your own files. • Information from other Government bodies , such as industry Departments, Customs, Statistics. Pricing bodies. • Overseas counterparts. • Library searches • Your own staff.
M & A TRAINING • CONCENTRATION- information sources. • The Same as for markets but you will need more information relating to the size of the business after the merger. • This may be more difficult as much will be seen to be confidential by those that have the information. • It will often be hard to get accurate information and you may have to make an educated guess. The problem with a set % is that some will fall just under and others just over. Your information sources will be sensitive to that. • I understand that the Vietnamese market is currently characterized by monopoly and oligopoly. This may be changing but slowly. • That being the case most mergers are likely to breach the 50% threshold.
M & A TRAINING • Exemptions- information needs. • Again similar to before but probably a different emphasis . More emphasis on the likely positive aspects that may flow from the merger. You are past the initial assessment stage . • The focus will be on those who can give information about the economic or social benefits of the merger and that may talking more to social policy agencies as well as economic agencies . • Further you may want an expert in a university to provide view on the exemptions issue. • If as stated above most mergers in Vietnam are likely to breach the 50% threshold then the Exemption issue will be the most critical in most cases.
M & A TRAINING • Other Government agencies. • 1.Often not keen to assist but that changes over time. • 2. Concern about “confidentiality” • 3. Concern about giving “inaccurate” information. • 4.Need to establish protocols with the agencies mostaffectedincluding“confidentilialty”safeguards. • .There will be cases with agencies will be assisting the parties to the merger and will resent your interference.
M & A TRAINING • OTHER GOVERNMENT AGENCIES- overlapping jurisdiction. • There is sometimes an issue of other government agencies having a over lapping roles, e.g.. The Treasury approving mergers in the financial sector. • This requires careful co ordination and perhaps protocols. • Also it may be appropriate to co ordinate decisions where the timetable makes that possible. • This situation is not unusual in many jurisdictions but needs to be recognized and avoid conflict.
M & A TRAINING • OVERSEAS COMPETITION AGENCIES. • These can be very helpful. Especially regional ones who have similar markets and companies. • The older ones can be helpful too as they will have had your experience. • Contacts can be formal and informal. • In many cases there will be co operation agreements /Treaties . • Informal through the telephone and internet. • It is good to meet your counterparts and develop contacts. • There will be issues of confidentiality but they may be able to be overcome and worked around. • There will be language barriers. • Business does not like this co operation unless it helps them.
M & A TRAINING • OVERSEAS COMPETITION AGENCIES • However always use overseas information as a guide. We are all different . • Often the same agencies are looking at the same matter at the same time or shortly after each other. Co ordination is needed in those cases for good administration and also that the parties to the merger do not play on off against the other. • The ICN , the OECD, UNCTAD and others will foster international co operation but at the end of the day it is up to you. • Remember you are part of an international network and you should use it. • Overseas agencies will usually be very helpful and if one cannot try another. • Further former staff on international agencies are happy to assist- often at no charge. • Co operation with overseas agencies will be critical on the increasing number of multi jurisdictional mergers. Some of which will affect Vietnam.
M & A TRAINING • CONCLUSION. • MERGER WORK IS USUALLY UNDER PRESSURE AND HAS TO LOOK TO THE FUTURE TO A LARGE DEGREE. • CONSEQUENTLY YOU NEED TO USE ALL SOURCES OF INFORMATION THAT YOU CAN, THINK LATERALLY . • YOU DO NOT HAVE TIME TO DO ALL THE RESEARCH YOURSELF .