14. Which forms of consideration are most commonly used?

Under Vietnamese law, shares can be purchased by offering cash, gold, land use rights, intellectual property rights, technology, technical know-how or other assets. In practice, acquisitions are most commonly made for cash consideration.

15. At what ownership levels by an acquirer is public disclosure required (whether acquiring a target company as a whole or a minority stake)?

The offer timetable is as follows:

• The bidder prepares registration documents for its public bid to purchase shares.
• The bidder sends the bid registration documents to the State Securities Commission (SSC) for approval and, at the same time, sends the registration documents to the target.
• The SSC reviews the tender documents within seven days.
• The bidder must publicly announce the tender offer within seven days from receipt of the State Securities Commission’s opinion regarding the registration of the tender offer
• The board of the target must send its opinions regarding the offer to the SSC and the shareholders of the target within 14 days from receipt of the tender documents.
• The bid is announced in the mass media (although this is not a legal requirement).
• The length of the offer period is between 30 and 60 days.
• The bidder reports the results of the tender to the SSC within 10 days of completion.

Companies operating in specific sectors (such as banking, insurance, and so on) can be subject to a different timetable.

16. At what stage of negotiation is public disclosure required or customary?

The bidder must publicly announce the tender offer within seven days from receipt of the State Securities Commission’s opinion regarding the registration of the tender offer.

17. Is there any maximum time period for negotiations or due diligence?

There are no limitations (maximum or minimum) under Vietnam law on the time period in which the parties are required to conduct negotiations and/or due diligence.

18. Are there any circumstances where a minimum price may be set for the shares in a target company?

There are no general requirements under Vietnam law that set certain minimum price for shares in a target company.

19. Is it possible for target companies to provide financial assistance?

There is no general prohibition under Vietnam law on target companies providing financial assistance to acquirers. However, such provision of financial assistance to acquirers may result in breach of fiduciary duties of directors of the target company.  In this regard, the directors of the target company should be mindful of their duties to the target company because, providing financial assistance to an acquirer may be considered to be harming the target company while benefiting the majority shareholders of the target company or the acquirer, depending on the nature of such assistance.

20. Which governing law is customarily used on acquisitions?

Buyer and sellers are free to decide on the governing law of the transaction agreements. Nevertheless, in deals that involve a Vietnamese target company, the governing law is customarily Vietnam laws.

Author: Dr. Oliver Massmann

Email: omassmann @duanemorris.com