A. Acquisition of Public Joint-Stock Companies
1. Regulations on Public Tender Offers
Acquiring a public joint-stock company in Vietnam involves stringent regulations and processes to ensure transparency and fairness. When an investor intends to acquire 25% or more of the voting shares or increase their ownership beyond thresholds of 35%, 45%, 55%, 65%, or 75%, they must conduct a public tender offer and disclose information through mass media.
The public tender offer must be open for a minimum of 30 days and a maximum of 60 days. The tender offer price, paid in cash, cannot be lower than the average reference price of the 60 trading days immediately preceding the submission date of the public tender offer and cannot be lower than the highest purchase price in previous public tender offers for the target company’s shares or closed-end fund certificates within this period.
In the case of a public tender offer using issued shares, the share exchange ratio must be approved by the General Meeting of Shareholders of the tendering organization according to Article 53 of Decree 155/2020/ND-CP.
2. Information Disclosure Regulations
Organizations or individuals becoming major shareholders (owning 5% or more of the voting shares) or experiencing changes exceeding 1% of the voting shares of a public company or public securities investment company must disclose information and report the transaction to the public company, the securities investment fund management company, the State Securities Commission, and the Stock Exchange (for listed or registered shares) within 5 working days.
Additionally, investors must also disclose information about the public tender offer through mass media. The content, language, and method of information disclosure are specifically regulated by Circular 96/2020/TT-BTC Guiding Information Disclosure on the Securities Market.
Information disclosure regulations in M&A are crucial for ensuring transparency and fairness in the securities market. These regulations require major shareholders and investors to publicly disclose significant changes in ownership, protecting minority investors, allowing regulatory oversight, and enabling timely responses to potential M&A activities. This regulation also helps control insider trading, supports the due diligence process, and ensures legal compliance in M&A transactions, thereby creating a healthier and fairer investment environment.
3. Procedures and Steps
- Step 1: Develop a tender offer plan and prepare registration documents.
- Step 2: Submit the public tender offer registration documents to the State Securities Commission (SSC) and also send them to the target company and the securities investment fund management company.
- Step 3: Within 3 working days from the receipt of the public tender offer registration documents, the target company and the securities investment fund management company must publicly announce the receipt of the public tender offer request on their electronic information pages and the Stock Exchange.
- Step 4: Within 15 days of receiving a complete and valid registration document, the State Securities Commission will notify the tendering organization or individual in writing and publish on the SSC’s website that the public tender offer registration documents have been received. If rejected, a written explanation with reasons must be provided (this does not apply to cases of issuing shares for public tender offers as stipulated in Article 53).
B. Acquisition of Non-Public Joint-Stock Companies
1. Regulations on Share Transfer
Shareholders have the right to freely transfer shares, except when the company’s Charter restricts transferability. Existing shareholders have a right of first refusal to purchase newly issued shares corresponding to their ownership ratio. Share transfers must be recorded in the company’s shareholder register and comply with the provisions of the Enterprise Law 2020 and the company’s Charter.
2. Procedures for Registering Changes in Foreign Investor Shareholders
- Prepare documents for amending the business registration certificate according to the type of business and changes stipulated in Article 58 of Decree 01/2021/ND-CP.
- Submit the documents to the Business Registration Office where the business is registered.
- The Business Registration Office will review the validity of the documents and process them.
- If needed, the Business Registration Office will issue a Certificate of Registration Amendment for the business.
- For more information or to discuss your acquisition needs, please contact us today. We are here to help you navigate the complexities of acquiring public and non-public joint-stock companies in Vietnam.
- Harley Miller Law Firm “HMLF”
- Address: 14th floor, HM Town Building, 412 Nguyen Thi Minh Khai, Ward 05, District 3, Ho Chi Minh City.
- Phone: +84 937215585
- Website: hmlf.vn
- Email: miller@hmlf.vn
