First of all, a trademark embodies the commercial value that a business has accumulated over the course of its operations: Through its name, symbol, logo, or slogan, a trademark represents the company’s reputation, product quality, market recognition, and customer loyalty. When acquiring a business, the purchaser is therefore acquiring not only its physical assets, technology, or existing revenue, but also the ability to continue leveraging the commercial reputation and market appeal associated with the trademark. In many cases, the value of a trademark may substantially exceed the value of the company’s tangible assets.

A trademark also serves as a legal instrument that enables a business to maintain its market presence and prevent third parties from using identical or confusingly similar signs: The purchaser’s ability to continue operating the business after closing depends directly on whether it effectively acquires ownership of, or lawful rights to use, the trademark. If the trademark has not been registered in key markets, is registered in the names of the founders rather than the company, or is subject to disputes with third parties, the investor may be unable to fully exploit the asset for which it has paid.

The legal status of a trademark is therefore a critical factor in assessing the security of an M&A transaction: Issues such as disputes over trademark ownership or use, expired registration certificates, overly narrow scopes of protection, pending oppositions, or third-party requests for invalidation or termination of a registration certificate may all diminish the value of the target company and expose the purchaser to post-closing legal risks. Engaging legal advisors to conduct trademark due diligence in an M&A transaction not only enables a comprehensive review of the target company’s intellectual property portfolio but also helps identify and mitigate potential legal risks that may arise after completion of the acquisition.

A trademark may also generate revenue through assignments, licensing arrangements, franchising, or other forms of commercial cooperation: A well-known or widely used trademark enables a business to expand into new markets without necessarily investing directly in manufacturing facilities or distribution networks. In the context of M&A, trademark assignment agreements, trademark license agreements, and franchise agreements may significantly affect the investor’s ability to exploit the acquired asset. Whether the license is exclusive or non-exclusive, the territorial scope, contractual term, and termination rights all directly influence the economic benefits that the trademark can generate after the transaction.

Beyond its revenue, a trademark may also possess substantial standalone value as an intangible asset capable of independent valuation: Such valuation may be based on the trademark’s income-generating capacity, hypothetical royalty rates, or the economic benefits derived from ownership of the trademark. However, intellectual property valuation remains relatively uncommon in Vietnam due to the lack of reliable market benchmarks and specialized valuation professionals with expertise in valuing such assets. At present, the Intellectual Property Office of Vietnam has only begun supporting patent valuation activities and has not yet developed similar mechanisms for trademarks, indicating that Vietnam’s intellectual property valuation market is still developing.

Trademarks continue to play a significant role in post-merger integration strategies: Investors must often determine whether to retain the acquired trademark, combine it with their existing brand portfolio, or gradually phase it out. Eliminating a well-established trademark too quickly may result in the loss of customer loyalty and the commercial value the investor paid for. Conversely, maintaining too many trademarks may increase management costs, dilute resources, and weaken the company’s overall branding strategy. A notable example is the Kinh Đô trademark for confectionery products. After Mondelēz International acquired 80% of Kinh Đô Corporation in late 2014 and subsequently acquired the remaining 20% in July 2015 to obtain full ownership, the Kinh Đô trademarks were not replaced. Instead, they continued to be used for confectionery products alongside Mondelēz’s global brands. This strategy enabled the acquirer to capitalize on the strong brand recognition and customer loyalty that the Kinh Đô trademark had established among Vietnamese consumers.

In light of the foregoing, trademarks should be regarded as intangible assets of substantial value in M&A transactions, contributing significantly to both the security and long-term success of a transaction. Proper identification of the trademark owner, the scope of legal protection, the ability to commercially exploit the trademark, its economic value, and the mechanism for its transfer are all essential to ensuring that investors fully acquire the commercial value embodied in the target business.