There are various ways to acquire interests in entering the Vietnamese market under a form of local corporation.
Among them, when making a joint venture with a Vietnamese company, we may
conduct due diligence (DD) to conduct a survey on whether the company to
be joint venture is trustworthy as a partner company.
On the other hand, if you acquire a shareholding (stock etc.), DD may be
applied to the company being acquired.
Regarding DD, there are commercial DD, financial DD, tax DD, legal DD,
personnel DD, compliance DD, etc. However, when acquiring Vietnamese companies,
it is common to implement financial DD, tax DD and legal DD.
For finance DD and taxation DD, it is common to ask an accounting firm
or a law firm office as an independent third party.
Regarding each DD, it is commonly takes about one week in advance preparation,
one week in on-site field survey, one week by draft report draft, one week
in final report, total would take about a month. However, it is needed
to pay attention that complement time also depends on the cooperation situation
of DD target companies. Even if the acquirer and the manager of the acquired
company agree, there is frequent refusal or delay of submission of materials
in order for the management team of the acquired company to sell even a
little higher.
In addition, even though the management team of the acquired company is
favorable, at the workplace personnel level, it may happen that refusing
to submit the materials may occur, so it is necessary to pay attention.
In that case, it is necessary to conduct a meeting to communicate in order
to unify the intentions of the management team, the person in charge of
the site, the person in charge of DD, etc. beforehand.
If the person in charge of the acquiring company can not visit Vietnam
during the DD implementation period, it is necessary to respond flexibly
at the work site, ask the person who can manage the progress, and manage
the materials. As the person in charge of the DD can not strongly ask the
acquired company to submit materials, it is necessary for the person at
the acquiring company side to control it.
When implementing DD, it is necessary to pay attention when there is refusal
or delay in submitting materials. Depending on the degree, there are refusals
and delays due to the information you want to hide somewhat, so in such
cases there may be situations where it is difficult to manage the project
even after the acquisition.
In fact, even in cases where Japanese companies bought a problem, problems
were raised about issues that were not sufficient for submission of materials
when DD was implemented, requiring additional investment and human support
beyond the purchase amount There are also cases. The Vietnamese market
is an attractive market and Vietnamese companies are talking about acquisitions
with a large number of Japanese companies, so the proposal seems to be
an attractive and instantaneous opportunity, but careful consideration
is needed.