LEGAL INSIGHT No. 01/2026
23 June 2026
A recent M&A transaction that we were involved in ultimately did not proceed.
What was interesting was that the transaction did not fall apart because of a material legal issue, an unexpected due diligence finding or a dispute between the parties. After several rounds of discussions, due diligence and negotiations, the parties simply could not bridge the gap in how they viewed the value of the business.
Looking back, three observations stand out. While these observations arose from a particular transaction, they are by no means unique. They are frequently seen in M&A transactions, particularly those involving foreign strategic investors.
1. Value and price are not always the same
For sellers, value is often shaped by what has been built over many years: the brand, customer relationships, distribution channels, management team, assets, market position and future growth opportunities of the business.
Buyers, however, tend to view the same business from a different perspective. Their focus is not only on what the business is today, but also on what will be required to sustain, improve and grow it after closing. As a result, it is not uncommon for both sides to arrive at very different conclusions regarding valuation and price while relying on equally reasonable assumptions.
2. A well-run business is not necessarily a business that is ready for M&A
In many cross-border transactions, investors are not assessing a business solely on the basis of its assets, revenue or market share. They are also concerned with the transparency of the business, the reliability and verifiability of information, and the extent to which the business can be integrated into their governance, reporting and operating framework after the acquisition.
This is why factors such as the quality of management reporting, transparency of financial information, accounting systems, internal controls, accessibility of data and process standardization can significantly influence how investors perceive value.
A business may be commercially successful, have a loyal customer base and operate effectively within its market. However, that does not necessarily mean it is ready for an M&A transaction, particularly where the buyer is a foreign strategic investor or a large corporate group with higher expectations regarding governance, compliance and post-acquisition integration.
3. Investors are not only valuing today’s business
One of the most common differences between sellers and buyers lies in how they view the future.
What a seller sees as growth potential may be viewed by a buyer as additional capital expenditure, restructuring costs, working capital requirements or financial obligations that will need to be addressed after closing.
Similarly, existing debt, future investment needs and the costs of upgrading governance and operational systems are often carefully reflected in a buyer’s valuation model. Matters that a seller may regard as manageable after an investment is made may be viewed by a buyer as costs that should already be reflected in the purchase price or deal structure.
In other words, investors are not only valuing today’s business. They are also pricing the execution, resources and investment required after they become the new owners.
This is why, in many M&A transactions, both sides may have entirely reasonable arguments and yet still be unable to reach an agreement, because the real issue is often not the price itself, but the assumptions and expectations behind that price.
When both sides share a sufficiently similar view of the business and its future prospects, transactions have a greater chance of moving forward. When they do not, deciding not to proceed may simply be the most sensible outcome for everyone involved.
Contact
Le Nguyen Huy Thuy
Managing Partner
VIETRIDGE COUNSEL
E: thuy.le@vietridgecounsel.com
