The global market for mergers and acquisitions (M&A), not excluded from the influence of Covid-19 pandemic, seems to be postponed as many M&A projects has been affected and even changed to initial expectation [1]. At the same time, Vietnam's M&A market also does not stay out of exceptions compared to the general situation when witnessing a significant number of divestments currently happening, specifically several divestments in recent times, for example: Korea Investment Management Co., Ltd (KIM) fund group has officially announced that it is no longer the major shareholder of Viet Nam Electrical Equipment Joint Stock Corporation, meanwhile, it reduces the ownership rate in Nam Kim Steel Joint Stock Company; Hancorp successfully divested from ICON4; Dragon Capital fund group reduced its ownership at Khang Dien House; FTIF-Templeton Frontier Markets Fund has announced that it has completed selling 50,000 shares of Binh Minh Plastic Joint Stock Company, which accordingly reduces its ownership from 5.02% of charter capital to only 4.96% and leads to removing it as a major shareholder since 15th September, 2020.

Currently, there is no any specific definition of divestment in legal documents. From a business perspective, divestment may mean the withdrawal of initially invested capital in the target company by the Investor. In other words, at the initial stage, the individuals or organizations contribute capital to operate their business, however, due to various objective factors, the parties do not continue to participate in business activities and therefore decide to withdraw their capital.

There are numerous reasons for the Investor's divestment, possibly as the Investor and the target company did not reach their agreed business plans, or as the parent company divested a part or all of the invested capital from the subsidiary since it needs addition capital or wants to eliminate the underperforming subsidiary or due to shifts in politics and society or other reasons.

To carry out the divestment, the Investor and related party should follow the procedures and comply with the current legal regulations of the Laws on Enterprise, the Laws on Investment, the Laws on Securities and other related legal regulations.

Regardless of the quantity of investors with successful divestment, there are still other investors who offer to sell their capital for many times but there are no any buyers. The reason may be since the target company's business has fallen down and been lack of competitive favors in the market, or a deficit in cash flow. Therefore, the investor should consider the appropriate time of divestment in order to promptly and successfully divest without affecting the target company's operations and not violate each parties’ commitments (if any) and keep staying in an appropriate scope pursuant to the laws.

[1]https://vietnamfinance.vn/thi-truong-ma-toan-cau-xao-tron-vi-dich-covid-19-20180504224242418.htm