In recent years, the healthcare sector has witnessed a strong wave of mergers and acquisitions (M&A). Not only private hospitals but also clinic chains, laboratory centers, and health‑tech companies have become attractive investment targets. But for a deal to succeed, especially in a specialized field like healthcare, the key factor lies in thorough legal preparation. This article provides you with a comprehensive view of the legal procedures in healthcare M&A transactions, as well as important notes to ensure that the deal proceeds smoothly and in compliance with the law.

Why has the healthcare sector become a hot spot for M&A deals?

Before diving into the procedures, let us look at the bigger picture. With growing demand for healthcare, along with the trend of socializing medical services and foreign investment flowing into Vietnam, enterprises operating in the healthcare field hold significant profit potential.

However, this is also a sector tightly regulated by law, involving professional licenses, ownership conditions, specialized personnel, and many other sector‑specific regulations. Therefore, M&A in healthcare is not simply share or asset transfer — it is a legally complex process that requires deep advising and industry insight.

Key legal steps in healthcare M&A transactions

To make an M&A deal in the healthcare/hospital sector successful, one must go through the following basic legal steps:

Advising the transaction structure in compliance with sector laws
Each M&A deal must clearly define the form: share/ownership transfer, asset acquisition, or full merger. In healthcare, choosing the transaction structure must factor in enterprise type, foreign ownership rights, medical licensing conditions, and the continuity of hospital/clinic operations post‑acquisition.
Some fields such as hospitals or general clinics require healthcare practice licenses issued by the provincial Department of Health, and the head of medical practice must hold appropriate professional licenses. If the buyer fails to meet these conditions, they cannot maintain operations post-M&A without careful restructuring.
Conducting legal due diligence
This is an indispensable step to comprehensively assess the target enterprise. In healthcare, the due diligence must especially focus on:
- Legal status of the medical operation license
- Professional licenses of doctors and medical staff
- Ownership status of land, machinery, medical equipment
- Professional liability insurance contracts (if any)
- Tax records, labor, and potential disputes
  Legal due diligence not only helps the investor understand risks, but also serves as the basis for negotiating price and contractual terms of the transfer.
Drafting, negotiating and executing relevant agreements
After agreement on negotiation contents, parties will execute legal documents such as:
- Share/ownership purchase agreement
- Memorandum of understanding (MOU)
- Loan agreements, deposit agreements (if needed)
- Confidentiality agreements, non‑compete agreements, etc.
  Especially in healthcare, additional clauses should be included regarding commitments to maintain service quality, conditions for continued operation, legal responsibilities related to medical records, specialized assets, etc.
Carrying out licensing adjustment procedures and notifying regulatory authorities
Immediately after signing the agreement, the next step is implementing mandatory legal procedures, including:
- Changing business registration at the Department of Planning & Investment
- Adjusting the investment registration certificate (if there is a foreign investment component)
- Notifying the Department of Health and adjusting medical practice licenses (in case of change of professional representative)
- Updating the legal representative on subsidiary licenses, professional licenses, etc.
  Each type of medical enterprise has its own procedures — e.g. specialty clinics differ from general hospitals. If this step is overlooked, it is easy to face administrative penalties or even suspension of activities.

Notes when conducting M&A transactions in healthcare

To avoid pitfalls along the M&A path, here are key notes businesses must focus on:

First, do not underestimate the legal value of medical licenses
In a healthcare M&A deal, value lies not only in brand or revenue but also in the operation license. Some investors mistakenly think that holding managerial rights is enough, but without a license, the enterprise cannot operate legally.

Second, carefully verify the legality of assets
Medical machinery, equipment, pharmaceuticals, etc., may be large assets, but without valid invoices or proof of origin, they may be excluded from the transaction or subject to tax reassessment.

Third, prepare a post‑M&A operational transition plan
Acquisition is not simply “buy and done.” For healthcare enterprises, the transition needs a clear operational plan, especially regarding medical staff, medical record management systems, health insurance linkage, cooperation with third parties (insurance, equipment suppliers, etc.).

DEDICA – Your reliable legal partner
At DEDICA, we have a team of lawyers and legal experts with extensive experience in M&A transactions. We not only understand the law, but also understand the industry — from medical practice licenses, professional conditions to post‑merger operation of healthcare enterprises.
DEDICA has successfully advised many M&A deals. We commit to accompany clients in every step, from advising transaction structure, legal due diligence, contract negotiation to completing registration procedures and adjusting medical licenses.

While healthcare M&A holds great potential, it also hides many legal risks if not properly advised. Understanding legal procedures and preparing thoroughly will not only help businesses save time and cost but also create a solid foundation for sustainable development after the deal.
Are you planning to invest in the healthcare sector through M&A?
Let DEDICA Law Firm accompany you and bring you a comprehensive legal solution — ensuring an effective, lawful transaction aligned with your business strategy.
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