(July 2): The world has faced plenty of disruption this year, but that hasn’t derailed business in and out of the Asia Pacific, where the volume of deals such as mergers and acquisitions has already topped US$750 billion in 2026.
The first-half figure is 30% higher than a year ago, with investors particularly drawn to buzzy sectors like digital infrastructure and healthcare. Dealmaking has been strong worldwide as well, despite geopolitical ructions and market volatility — global transaction values, at US$2.6 trillion, are on course to pass a record haul from 2021, data compiled by Bloomberg show.
In APAC, deals include the US$43 billion privatisation of Toyota Industries Corp, Sun Pharmaceutical Industries Ltd buying US healthcare firm Organon for US$12 billion, Savvy Games Group’s US$6 billion acquisition of mobile game developer Moonton, and CK Hutchison Holdings Ltd exiting some UK businesses.
“M&A led by China has proven to be very resilient with continued strong activity,” said Sushil Bathija, head of M&A for Asia ex-Japan at Goldman Sachs Group Inc.
War in the Middle East has been the main factor upending global markets, with oil and gas supplies getting stuck in the Strait of Hormuz as talks and ceasefire agreements come and go.
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“It’s a complex and volatile environment, so boards need to be nimble and focused on risk mitigation for cross-border deals, especially as FX and regulatory changes impact transactions,” said Tom Barsha, Bank of America Corp’s head of APAC M&A.
Japan is the busiest market for M&A in the region, and there’s good momentum in places such as Australia, said Barsha, who is also BofA’s co-head of investment banking coverage for APAC. The outlook is also positive for India, where activity has been relatively tepid, he added.
India’s stock market is also lagging as fortunes vary wildly across APAC. The Sensex in Mumbai fell 10% in the first half, putting it — along with Hong Kong’s Hang Seng Index — among the world’s worst-performing major gauges. Meanwhile, the Topix in Tokyo rose 17% and Seoul’s Kospi soared 101%.
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The year started with a bang for Greater China, with outbound M&A volume approaching US$12 billion in January alone, the most for the first month of a year since 2017. Big names like German sports brand Puma SE and Canadian miner Allied Gold Corp were on Chinese shopping lists.
Activity has slowed though as deals struggle to get over the line. ENN Natural Gas Co last month terminated a planned restructuring that would’ve included a nearly US$12 billion buyout offer for ENN Energy Holdings Ltd and a second listing in Hong Kong. It said it made the decision because of uncertainty over obtaining regulatory approvals.
Coming from another angle, some famous brands are reassessing their approach to business in the world’s second-biggest economy. General Mills Inc is selling its Häagen-Dazs shops in mainland China, following in the footsteps of Starbucks Corp. Sweden’s Oatly Group AB is also conducting a review.
“Even as some companies reassess their footprint, China remains too important a market for global corporates to ignore,” Goldman’s Bathija said.
Japan is on track to outpace last year’s record M&A haul as policymakers push companies to boost shareholder returns. The yen is at its weakest level against the dollar in 40 years and interest rates are relatively low.
Private equity firms are also in hot pursuit of acquisitions. That’s led to a bidding war in the case of online marketplace Kakaku.com, with Bain Capital and LY Corp poised to challenge EQT AB’s offer for the company. Meanwhile, Warburg Pincus launched a US$1.2 billion tender offer for student housing firm JSB Co, in what would be its first take-private investment in Japan.
“The high volume of deal activity in Japan, both domestic and outbound, is poised to continue,” said Akihiko Manaka, BofA co-head of investment banking and also M&A for Japan. “The increasing level of activism campaigns is leading to more asset sales, take privates and other private equity-led deals.”
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In a report published this week, Bain & Co said Japan private equity is one of the world’s most attractive markets for investors, supported by strong returns, a growing pipeline and corporate transformation. As a result, competition is intensifying and raising the bar for firms, it said.
M&A in Southeast Asia has been supported by consolidation in fragmented sectors and the build-out of digital infrastructure, particularly data centres, said Rohit Chatterji, head of APAC M&A at JPMorgan Chase & Co.
Some of world’s largest infra-focused funds are considering bids for the APAC data centres of Blue Owl Capital’s Stack Infrastructure Inc, people familiar with the matter said last week. The assets in Japan, Australia and Malaysia may fetch a valuation of more than US$30 billion.
“The investment going into data centres and AI infrastructure rivals in scale what you have seen in the United States,” Chatterji said, adding that deal flow is expected to be strong well into next year.
Matthew Nimtz, head of Asean investment banking at Citigroup Inc, also said significant capital raising and bigger transactions are likely for Southeast Asia. “We are participating in a number of promising discussions in Indonesia, Thailand and Vietnam.”
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