What happened: Trade War 2.0, Trump-driven volatility, and fluctuating interest rates distorted global M&A flows. Capital moved away from the US and found stability, attractive valuations, and political predictability in Asia.
The numbers: APAC reached USD 1.3 trillion in deal value (+21% YoY), despite fewer transactions. The market became more concentrated and more strategic. Japan hit record volumes, and China also regained significant momentum.
The shift: State-led reforms in China, governance pressure in Japan, and Hong Kong’s comeback turned the region into a global M&A magnet in uncertain times.
🇨🇳 Greater China
China reloaded: State guardrails, SOE-led mega-deals, and attractive valuations are driving domestic M&A. Selective foreign capital is cautiously returning.
Capital in transition: Western investors are stepping back. Gulf sovereigns and regional players are filling the gap—with longer time horizons and lower geopolitical sensitivity.
Hong Kong as a release valve: An IPO boom, PE exits, and Stock Connect are restoring Hong Kong’s role as a hub for dollar assets, while the mainland releases capital in a controlled way.
The details
Deal dynamics: Greater China reached USD 399 billion in deal value (+46% YoY), driven by USD 335 billion in domestic M&A. Fewer deals, but larger, politically supported transactions.
The state as conductor: “National Nine” and “M&A Six” are channeling capital into semiconductors, AI, EVs, and biotech. The goal: national champions, less speculation, more industrial depth.
Who is selling: Multinationals are restructuring after the 2025 tariff shock. Starbucks and Burger King are giving up control to regain capital, local expertise, and growth.
SOEs as deal engines:Â 20 of 29 mega-deals (>USD 1 billion) in 2025 were led by state-owned enterprises.
Outbound: selective & political: Europe remains a target region, but sensitive (remember: Nexperia case). Growth is pursued via ASEAN JVs, green-energy projects, and offshore holding structures—not classic acquisitions.
🇯🇵 Japan
The take-private machine: A weak yen, governance reforms, and activist pressure are driving record take-privates. Japan has become a prime hunting ground for strategic buyers and PE.
Demographics force deals: A shrinking population and stagnant revenues mean Japanese companies must acquire to grow.
The details
Record levels: Deal volume reached USD 315 billion in 2025, far above estimates of around USD 207.5 billion. The highest level in 25 years, fueled by inbound capital and corporate restructuring.
Governance works: Where boards once said “no thanks,” TSE and METI now push companies to seriously review takeover offers and clearly justify rejections. This makes Japan more takeover-friendly and accelerates carve-outs.
Financing 2.0: Private credit structures combine equity and debt, lowering capital costs and enabling larger deals without overstretching balance sheets.
🇰🇷 South Korea
Focus over fireworks: Korea’s M&A remains selective. Chaebols are optimizing portfolios, while chips, batteries, and tech supply chains are being reshaped under new government plans. 2025 deal volume: around USD 57 billion.
Sponsor market over strategic show: Private equity and buyouts set the tone. Control was the objective—minority stakes were often just the entry point before taking the wheel.
The details
Market size with direction: Around 1,277 transactions were recorded in Q1. No boom in Q2 either, but clear momentum and significantly more activity than a year earlier.
Buyouts as the engine: Buyouts more than doubled (around USD 15.6 billion). Korea remains a control-driven market: investors want to shape, not just participate.
Exits are returning: Exits rose sharply (around USD 10.1 billion). Still no IPO frenzy, but enough liquidity for sponsors to rotate portfolios, lock in gains, and push new deals.
Outlook 2026
Asia remains mandatory: China, Japan, and Hong Kong stay core pillars of global growth strategies—especially amid geopolitical tension.
A new buyer logic: While US and EU investors hesitate, Gulf states and ASEAN players are better positioned to capture opportunities in China and across the region.
Sectors & structure: Biotech, healthcare, TMT, and AI drive deal activity. Convertible bonds and private credit become the preferred bridge between equity and debt.
Momentum: Deal flow in China accelerated noticeably in the second half—so 2026 starts not with hope, but with pipeline.
👉🏻 Deep Dives: Reuters, PwC, MergerMarket, BusinessTimes SG, A&O Shearman
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