Shareholders of North Kinh Do Company (NKD) on Friday approved a proposed takeover by Kinh Do Corporation (KDC) that would join the northern and southern branches of the commercial bakery operation into a single entity.
KDC shareholders are expected to approve the merger today.
Under the proposed deal, according to media reports, 1.1 shares of NKD would be convertible to one KDC share. Earning-per-share (EPS) after the merger would be estimated at VND6,489, according to NKD calculations, compared to KDC's current EPS of VND6,018 and NKD's VND6,449â.
The merger was expected to benefit both companies by eliminating overlapping business operations, finances and human sources, said KDC deputy director Luong Quang Hien.
The deal follows Kinh Bac Corporation's decision late last month to buy a majority interest in Saigon Tel. Earlier this year, stock market witnessed many M&A amongst public firms, including the merger between Ha Tien Cement No 1 & 2, Miraa Fiber and Miraa Corporation.
Dinh Quang Hoan, Head of corporate consultancy for Viet Capital Securities Company, commented that this season of shareholders meetings had seen more merger plans involving both listed and unlisted companies.
AI Capital Chairman Quan Duc Hoang attributed a boom in M&A activity to corporate realisations this year that they were facing significant challenges in capital and costs.
"This year is being viewed as a difficult time for many companies, a decisive year for their existence," Hoang said, noting that acquisitions also offered a quick way for smaller firms to grow and pick up market share.