In today’s investment landscape, mergers and acquisitions (M&A) are no longer merely about buying and selling businesses—they are strategic tools that enable investors to gain control, expand market share, access technology, or consolidate financial strength. However, to achieve these goals, investors must first develop a clear assessment strategy to determine whether the objectives set for the M&A transaction will be realized post-completion. This initial evaluation serves as the foundation for structuring the deal in a way that achieves—or at least closely aligns with—the investor’s intended goals.

This article explores M&A from a practical legal perspective, starting with identifying the nature of consolidation and control, and moving through various objectives such as market expansion, leveraging intellectual property, personnel control, targeted industries, and tax optimization. Rather than viewing legal considerations as a “final step” in the process, we should recognize them as a coordinating tool—one that helps investors both protect their interests and maximize long-term value.

1. What is M&A from a Legal Perspective?

In Vietnam, the term “M&A” is not officially defined in the legal system. Instead, it is generally understood through two common legal forms: Merger and Acquisition. Relevant regulations are scattered across various legal documents, such as the Law on Enterprises, the Law on Investment, the Law on Competition, and the Law on Securities.

A Merger, as defined in Article 201 of the Law on Enterprises, involves one or more companies merging into another company (or combining to form a new legal entity). The merged companies cease to exist as independent legal entities, while the receiving company inherits all rights and obligations.

An Acquisition typically takes place through the purchase of shares or equity capital from existing owners to gain control of the target company, without altering its legal entity. This is the most common form of M&A transaction in Vietnam.

At the initial stage of an M&A deal, investors may conduct—or engage legal advisors to conduct—an assessment of key legal considerations, such as:

• Identifying and selecting the appropriate transaction structure (share purchase, asset purchase, or legal merger), depending on the investor’s ultimate objective.
• Evaluating potential legal barriers, including conditional business lines, foreign ownership limits, and economic concentration reporting requirements.
• Developing a legal protection strategy for the buyer or seller throughout the negotiation, execution, and post-M&A phases.

2. Strategic Objectives of M&A from a Legal Perspective

From a strategic standpoint, businesses pursue M&A not merely to acquire another company, but to achieve synergies, economies of scale, or expand their market influence. Depending on the specific objectives an investor aims to accomplish through the transaction, different approaches and legal strategies may be adopted. Specifically:

2.1 Scaling Up – Economic Concentration Control

One of the most common strategic objectives of M&A is rapid business expansion through the acquisition of competitors or companies with strong market positions. However, if the transaction significantly increases the market share in a relevant sector, it may trigger violations under the economic concentration control regulations as stipulated in the 2018 Law on Competition. Additionally, under Decree No. 35/2020/NĐ-CP, if the combined revenue, total assets, or market share of the parties exceeds specified thresholds, the transaction must be notified to the National Competition Commission (NCC) for assessment and approval.

Therefore, investors and legal advisors should assess the combined market share, revenue, and total assets at the early stage of the deal. If these exceed the legal thresholds, it is essential to prepare and submit an economic concentration notification before signing or completing the transaction. This step must be viewed as both a necessary and sufficient condition for completing the M&A, in order to avoid regulatory sanctions.

2.2 Accessing Technology and Intellectual Property – Verifying IP Ownership Pre-Transaction

In technology-driven M&A deals, intellectual property (IP) assets such as source code, trademarks, patents, or technical solutions often determine the transaction’s value. However, many target companies—especially startups—may not legally own these IP assets. Source codes are often developed personally by founders, trademarks may be registered under individuals or third parties, or there may be undisclosed disputes. This poses a serious risk to the buyer: acquiring “virtual assets” or facing post-transaction litigation.

Depending on the investor’s strategic goals, in-depth due diligence should be tailored accordingly. If the transaction centers on technology and IP assets, a specialized IP due diligence must be conducted early, including review of source codes, trademark and patent registrations, and software usage rights. Additionally, during the negotiation and drafting of transaction documents, warranties and indemnities clauses must be carefully designed to protect the buyer against risks related to IP disputes or ownership claims that may arise post-M&A.

2.3 Human Capital Optimization – Retaining Key Personnel Post-Transaction

In many M&A transactions—especially in technology, creative industries, healthcare, or professional services—the true value of a company lies not in its tangible assets but in its core team. Without a legal strategy to retain and control human capital, the acquirer risks losing the very essence of what made the target valuable after the deal closes.

To anticipate potential disruptions or prevent bad-faith actions from competitors, acquirers often require key measures such as:

• Signing long-term employment contracts, ESOP agreements, or retention plans before the transaction;
• Including Non-Compete and Non-Disclosure Agreements (NDA) in the SPA or separate contracts;
• Linking payment milestones or retention bonuses to key personnel’s post-M&A performance.

2.4 Industry Diversification – Assessing Conditional Sectors and Investment Restrictions

Many M&A deals are driven by the goal of entering new sectors such as real estate, education, fintech, or healthcare. However, these industries are often subject to conditional business requirements or foreign ownership limits, which may lead to complex licensing, investment, and business registration procedures.

At the early stage of the transaction, legal advisors typically conduct a review of the target’s business lines under the Law on Investment and relevant regulations. If foreign investors are involved, the team must assess the maximum allowed ownership percentage, and whether investment approvals are required. Procedures may include registering or amending the Investment Registration Certificate (IRC), Trading license or retail location operating rights or other sub-licenses applicable to foreign-invested entities.

2.5 Tax and Financial Optimization – Choosing the Right Deal Structure

With the same M&A goal, different deal structures—share purchase versus asset purchase—can lead to vastly different tax and financial obligations. Without a thorough analysis, buyers may face double taxation or inherit undisclosed financial liabilities post-acquisition.

A comprehensive tax review should be conducted, covering transfer taxes, corporate income tax, VAT, and potential debts. It’s essential to draft risk-sharing clauses to protect the buyer from unexpected financial obligations after the transaction is completed.

In M&A deals, a successful investor is not merely the one who acquires the right company—but the one who understands the rules  market operation and use legal frameworks to guide the transaction in the right direction. From market concentration assessments and IP ownership due diligence to key personnel retention and financial structuring, every legal element can serve either as a strategic lever or a critical vulnerability if overlooked.

M&A is a high-stakes game—and in this game, law does not follow business. It moves in tandem and  even leads to investment decisions. A clear legal strategy not only reduces risk but also creates a powerful edge in negotiations and execution deals. Merging legal entities may be the starting point—but strategic legal control is where real value is unlocked.

Time of writing: 18/03/2025

The article contains general information which is of reference value, in case you want to receive legal opinions on issues you need clarification on, please get in touch with our Lawyer  at  info@cdlaf.vn

You can refer for more information:

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