In M&A deals (Mergers and Acquisitions), “Due Diligence” is a key step that determines the success or failure of the whole process. However, in Vietnam, many businesses - especially small and medium-sized enterprises (SMEs) still ignore or perform due diligence in a formal way, leading to serious legal and financial risks.

So what is Due Diligence?, what steps does this process include, and what should be kept in mind to ensure success in an M&A deal?

1. What is Due Diligence?

Due Diligence is the process of comprehensive examination and assessment of the financial, legal, operational, human resources and technology situation of the target enterprise.U before signing the M&A contract. Class = "QL-SIGN-JUSTIFY"> as a basis for contract terms and price negotiations

• Check the business license, company, shares-shareholders. Class = "QL-SIGN-JUSTify"> Review cLegal disputes, law violations (if any). Financial Diligence (Financial Diligence)
  • Check the financial statements, cash flow, receivable-payable. Class = "QL-SIGN-JUSTIFY"> Detects book deviations or potential debts. Product price, product quality/service quality.-justify">2.4. Human resource appraisal (HR Due Diligence)
    • Review labor contracts, salary and bonus policies.
    • Analyze organizational structure, risks of key personnel.
    • Check compliance with labor laws.

    2.5. Technology & intellectual property appraisal

    • Check intellectual property rights (patents mechanism, software copyright...).
    • Assess IT system capacity, network security risks.
    • Analyze the degree of dependence on third parties.

    3. Due implementation process Diligence.

    Step 1: Preparation

    Step 1: Preparation

    • Sign an information confidentiality agreement (NDA)
    • Determine the scope of appraisal according to business objectives

    Step 2: Collect information news

    • Request records and data from the target business
    • Check legal, financial, operational, human resources records

    Step 3: Analyze and assessment:

    • Identify risks, irregularities, or potential obligations
    • Make recommendations to adjust the purchase price, or deal structure

    Step 4: Prepare Due Diligence report:

    • Presenting results, conclusions and recommendationsHo leadership or investor

    4. Consequently, if ignoring Due Diligence

    Many M&A deals have failed in Vietnam in recent years have shared a mistake: ignoring or making sketchy evaluation. Consequences may include:

    • acquiring an underground debt or legal dispute that has not been announced
    Large customer dependence
    • Difficult to integrate personnel, corporate culture, leading to loss of talent

    5. Situation of Vietnam market (2025)

    Calculate the baseIn the 3rd quarter of 2025, Vietnam recorded a significant increase in the number of M&A deals, especially in the industry group such as:

    • Clean energy (due to ESG movement)
    • Industrial real estate (beneficial from chain switch Class = "QL-SIGN-JUSTIFY"> Technology Start-up (strongly invested by foreign funds and domestic companies)

    However, small and medium enterprises (SMES)-The object accounts for 90% of the total number of enterprises-often lacks preparation in the record, financial transparency, causing many difficulties. This increases costs and risks for both sides. The state of Vietnam market (2025)

    Due Diligence is not only a test step-but "Lu."sure" protects both buyers and sellers. In the context of the increasingly vibrant M&A market in Vietnam, thorough appraisal will help you not only avoid risks but also take advantage of smart growth opportunities through M&A.