Mergers and Acquisitions: Unlocking the Potential for Profitable Ventures and Super-Companies in Ho Chi Minh City

On May 22nd, the Steering Committee for the proposal to merge the two provinces of Bac Lieu and Ca Mau met to discuss post-merger scenarios.

Some delegates proposed maintaining the status quo of seven state-owned enterprises across the two provinces, including the Ca Mau and Bac Lieu Lottery Companies.

Meanwhile, Mr. Lu Quang Ngoi, Chairman of the People’s Committee of Vinh Long Province, shared that the three provinces of Vinh Long, Tra Vinh, and Ben Tre have proposed retaining their respective lottery companies post-merger. This decision is currently pending review by the Steering Committee for the rearrangement of administrative units at the provincial level.

According to Tuoi Tre newspaper, a leader of a lottery company in the Mekong Delta region expressed concern about the lack of guidance from the Ministry of Finance as of April 21st. “We are anxious and uncertain about the future,” the leader said.

At the 137th Southern Lottery Conference held on April 24th, discussions revolved around the potential merger of lottery companies post-provincial consolidation and the subsequent lottery issuance and prize structure.

The Chairman of Ca Mau Lottery One-Member Limited Liability Company suggested that post-merger, the current lottery companies could be maintained or a parent company with subsidiaries could be established.

For example, in the case of the merger of Vinh Long, Tra Vinh, and Ben Tre provinces, the parent company could be based in Vinh Long, with subsidiaries in the other two provinces. The prize structure would be centralized within the parent company.

Mr. Hai proposed, “We need to devise mechanisms and policies to safeguard the interests of the subsidiary companies, thereby stabilizing the overall market.”

The Southern region of Vietnam is home to 21 traditional lottery companies. Over the years, these companies have consistently achieved ticket sales of over 99% of the issued tickets, with 13 companies reaching 100% sales.

In 2024, the traditional lottery sector generated a revenue of VND 140,587 billion, a 2.86% increase from 2023, equivalent to over USD 5 billion. Pre-tax profits reached VND 18,067 billion, a 6.12% surge compared to the previous year, and exceeded the 2024 plan by 109.5%.

Based on the 2024 financial performance of the Southern lottery companies, a hypothetical merger would result in a significant surge in revenue and profits compared to their current standalone operations.

Ho Chi Minh City had the highest lottery revenue (approximately VND 27,200 billion), including the combined efforts of Ho Chi Minh City, Ba Ria-Vung Tau, and Binh Duong provinces.

On the other hand, Dong Nai province recorded the lowest lottery revenue (approximately VND 9,900 billion) by combining the efforts of Dong Nai and Binh Phuoc provinces.

In the Southern region, three lottery companies conduct draws from Sunday to the following Friday each week. Saturday is an exception, with four companies from four provinces holding draws. Each province is allocated one draw per week, except for Ho Chi Minh City, which is permitted two draws per week on Mondays and Saturdays.

Additionally, the Ministry of Finance has approved an increase in the business limit for traditional lottery ticket sales in the Southern region. Effective June 1st, the limit will be raised by VND 10 billion per lottery draw, reaching a maximum of VND 140 billion per draw for each company.

Consequently, each Southern lottery company will offer 14 million lottery tickets per draw instead of the current 13 million.

Given the consistent performance of the lottery sector over the years and its continuous growth trajectory, stakeholders—including local leaders, lottery companies, agents, street lottery ticket sellers, and citizens—advocate for maintaining the existing lottery companies and draw schedules during the implementation of the Central Committee’s merger proposal.

This approach ensures job security and income for employees of the lottery companies and street sellers, while also sustaining a stable source of revenue for local budgets.

In 2024, 30 lottery companies across Vietnam contributed over VND 48,000 billion to the state budget, with the 21 Southern companies alone contributing more than VND 46,000 billion, reflecting a 12.8% increase compared to 2023.

Furthermore, retaining the existing lottery companies aligns with preserving the tradition of lottery ticket purchases, which many citizens view as a way to seek good fortune and support their hometowns.