17 Forms of Mergers and Acquisitions (M&A)

In the context of strong economic integration, Mergers and Acquisitions (M&A) activities in Vietnam are increasingly becoming a crucial strategy for businesses to expand market share, enhance brand value, and optimize resources.

So, what exactly is M&A, and what are the different forms that companies can utilize? Join CFA as we explore the 17 most common forms of M&A today.

M&A is an abbreviation for the English term “Mergers and Acquisitions,” which is translated into Vietnamese as “sáp nhập và mua lại doanh nghiệp” or often referred to as “mua bán – sáp nhập doanh nghiệp.”

Simply understood, M&A is the process by which one enterprise gains control over another through the merger or acquisition of a part, or the entirety, of that enterprise’s capital or assets.

This activity is regarded as a form of corporate restructuring—assisting the parties involved in scaling up, leveraging resources, and optimizing business efficiency. Typically, M&A occurs between enterprises that share complementary development strategies or operational orientations.

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Merger 

A merger occurs when one or more enterprises (the merged entities) integrate into another enterprise (the acquiring entity).

All assets, rights, obligations, and legal interests of the merged entities shall be transferred to the acquiring entity.

Upon completion of the merger, the merged entities cease their legal existence, and only the acquiring entity continues to exist, inheriting all rights and obligations.

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Acquisition

This involves a company or corporation purchasing the entirety or a part of the capital contribution, shares, or assets of another enterprise.

The primary objective is to gain control or dominance over the business operations of the target enterprise.

The key distinction is that after the acquisition, the target enterprise retains its independent legal status but becomes a subsidiary, subject to the control of the acquiring enterprise (the parent company).

Thus, a merger typically results in the formation of a new or expanded legal entity, whereas an acquisition primarily involves the transfer of ownership and control, without dissolving the target enterprise’s original legal status.

1. Classification by Function of Participating Companies

• Horizontal M&A – A merger or acquisition between two businesses in the same industry, producing the same products or services. The objective is to expand the market, increase market share, and reduce competition.

• Vertical M&A – A transaction between companies within the same value chain but at different stages: e.g., a manufacturing company acquires a supplier, aiming to control input or output distribution.

• Conglomerate M&A – A large enterprise acquires several smaller businesses operating in different sectors or regions to diversify and mitigate market risk.

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2. Classification by Participating Entities

• Domestic M&A – Executed between enterprises within the same country, typically domestic companies or foreign-invested companies already operating locally.

• Cross-border/International M&A – Occurs between enterprises in two or more different countries; helping the acquiring company leverage international markets, technology, or experience.

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3. Classification by Scope – Territory

• Inbound M&A – A foreign enterprise invests in or acquires a domestic enterprise.

• Outbound M&A – A domestic enterprise invests in or acquires an enterprise in the international market.

• Domestic M&A (Purely Domestic) – Enterprises within the same country conduct mergers or acquisitions with each other.

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4. Classification by Transaction Purpose

• Product/Service Extension M&A – Transactions executed to supplement or expand the product/service lines that the current company does not yet possess.

• Market Extension M&A – Aimed at penetrating new markets, regions, or customer bases; often involves acquiring a company in the same industry but in a different geographic area.

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5. Classification by Financial Structure

• Acquisition-type M&A – One enterprise acquires most or all of another enterprise using cash or financial instruments.

• Merger-type M&A – Two or more enterprises merge to form a new legal entity; the old parties cease separate operations.

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6. Classification from Corporate Finance Perspective

• Equity Acquisition – The enterprise acquires shares or capital contributions of the target enterprise to gain control.

• Public M&A – The acquisition of listed shares of a public company on the stock exchange to control the target enterprise.

• Asset Acquisition – The enterprise acquires assets (machinery, projects, brand, etc.) without purchasing the entire legal entity; common when wanting to separate or exploit specific assets.

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7. Classification by Nature of the Transaction

• Friendly M&A – A transaction agreed upon by both parties, where the target company’s management cooperates actively, typically proceeding smoothly.

• Hostile M&A – The target enterprise disagrees with or resists the transaction; can occur via tender offers or proxy contests when the target’s management does not support the deal.

In reality, the duration of an M&A transaction can range from several months to over a year, depending on the scale, complexity, and the legal–financial status of the target enterprise (the merged or acquired entity).

Nevertheless, an M&A transaction is generally implemented through the following basic steps:

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Step 1: Target Identification

The acquiring enterprise conducts research, search, and selection of potential partners that align with its development strategy, financial capacity, and investment objectives.

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Step 2: Preliminary Target Assessment (Screening)

Conduct the collection of general information regarding the target enterprise’s business operations, assets, market share, personnel, and potential risks.

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Step 3: Selecting the Appropriate M&A Option

Based on the assessment results, the buyer or investor determines the execution method—whether it is a merger, consolidation, or acquisition of capital/shares—along with the suitable financial structure for the deal.

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Step 4: Valuation of the Target Enterprise

The enterprise conducts the valuation of assets, profits, brand, and potential value, which serves as the basis for negotiating the purchase price or the transfer ratio.

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Step 5: Negotiation of Transaction Terms

The two parties negotiate the key elements such as the transaction value, the rights and obligations of the parties, payment conditions, post-M&A commitments, etc.

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Step 6: Comprehensive Due Diligence (DD)

This is a crucial phase aimed at detailed examination of the target enterprise’s legal records, finance, contracts, taxes, labor, and intellectual property to ensure transparency and legality.

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Step 7: Signing and Transaction Implementation

Upon completing the due diligence, the two parties proceed to sign the transfer agreement, shareholder agreement, and related documents, simultaneously executing the transfer of shares, capital, or assets as agreed.

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Step 8: Fulfillment of Financial Obligations

The parties finalize payment obligations, declare, and pay taxes (if any), ensuring the transaction is legally recognized and transparent according to regulatory requirements.

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Step 9: Deal Finalization & Handover

The enterprise carries out the registration of legal content changes, updates the information in the Enterprise Registration Certificate or Investment Certificate, and officially transfers management and operational control.

With years of experience in the corporate investment and legal field, CFA proudly stands as a trusted partner for M&A transactions of numerous domestic and international enterprises.

We provide comprehensive solutions for Mergers and Acquisitions (M&A) activities—ranging from legal due diligence, valuation, and contract drafting, to completing legal procedures and post-M&A integration.

CFA consistently aims to maximize the protection of client interests while ensuring a transparent, secure, and efficient transaction process in compliance with Vietnamese law.

>> Explore our M&A Consulting Services