Market Insights

2023 Asia M&A Overview & 2024 Outlook

By 1 March, 2024March 12th, 2024No Comments

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2023 Global Market Summary

The global M&A market size fell by 20% to around $3 trillion in 2023, according to Bain&Co. This decline stemmed from several factors, including high interest rates, geopolitical tensions, and regulatory challenges. Private Equity (PE) funds struggled to raise capital, with Limited Partners adjusting allocations due to higher interest rates and waiting for Distribution to Paid-In (DPI) before committing to new investments. Consequently, their participation in M&A activities decreased by 57%.

M&A activity in the EMEA region has declined by 33%, with Europe experiencing the most significant decline due to the Russo-Ukrainian war. The APAC region, including Australia and India, saw a 28% decrease, while North America experienced a smaller decline of 6%.

Furthermore, the stagnant IPO (Initial Public Offering) market limited exit opportunities, contributing to the overall contraction of M&A investments. Buyers faced higher borrowing costs, leading to more thorough acquisition due diligence. Reduced potential returns and increased default risks required buyers to have greater confidence in their target companies. As a result, buyers and their advisors conducted more extensive investigative work, often resulting in higher transaction costs for both parties.

2023 Performance – By Region


In 2023, despite achieving a GDP (Gross Domestic Product) of approximately $20 trillion, China encountered significant economic challenges. Factors including US trade tensions, supply chain disruptions, geopolitical instability, rising labor costs, and sluggish economic recovery contributed to ongoing pressure on the economy. This was reflected in lower export rates, negative foreign direct investment (FDI), and consistently high household saving rates compared to pre-COVID levels.

The decline in exports, representing about 20% of the national GDP, led to a 4.6% year-on-year (YoY) decrease in 2023, marking the first annual decline in exports in seven years. China’s export performance was significantly impacted by a shift in its major trading partner, the United States, which increasingly sourced from countries like Turkey and Vietnam due to lower costs and greater supply stability. As a result, foreign direct investment (FDI) in China experienced an 8% YoY decline in 2023 as investors grew concerned about China’s prospects, while other Asian countries emerged as more attractive investment destinations.

China’s household saving rates remained persistently high, hitting a record level of $19.13 trillion by the end of 2023, with $7 trillion accumulated during the COVID-19 pandemic. This suggests that local Chinese households maintained a conservative approach toward their investments and expenditures throughout the year.

Southeast Asia

In 2023, M&A activity in Southeast Asia witnessed a decline compared to its peak in 2021; however, it still exceeded pre-pandemic levels in both total deal volume and value, reaffirming its dominant position as the primary contributor to M&A deals in the Asia Pacific region. Singapore, Indonesia, and Vietnam emerged as prominent leaders among the countries in this region, exhibiting a strong focus on sectors such as technology, industrials, consumer and retail, energy and natural resources, and financial services.

In the consumer and retail industry, the food and beverage segment excelled, while the industrial sector showed significant focus on electric vehicle (EV) cars. Additionally, the energy industry exhibited a growing interest in green energy initiatives. Notably, there has been an observed trend of increased private equity (PE)-backed investments in Southeast Asia (SEA). Research by EY indicates that PE-backed exits saw a substantial increase of US $895 million from Q3 2022 to 2023. This rise is attributed to a backlog of delayed portfolio company exits, higher PE dry powders, and a rebound in exit opportunities.

Graph showing Deal Volume and Value in Southeast Asia 2023Graph showing 2023 SEA Deal Volume


In 2023, M&A activity in India saw a significant decline, with deal values dropping by 63% from $192 billion to $70.9 billion compared to 2022, according to Bloomberg data. Geopolitical tensions stemming from conflicts and high interest rates have dampened investment demand, contributing to this decline. The 2023 India M&A data report revealed that all deals in India over the past 15 years were less than $100 million, except for one deal. Consequently, companies and investors are shifting towards smaller deals to navigate the Indian ecosystem.


Japan stands out in the Asia-Pacific region as the sole country experiencing a notable upward trend in M&A deal volume. According to S&P Global data, the number of M&A deals in Japan has surged to 1,425 between January and November 2023, surpassing previous periods. This remarkable growth can be attributed to Japan’s consistently low interest rates of -0.1% and the approximately zero 10-year Japanese government bond yield. These favorable financial conditions have significantly boosted the confidence of buyers and investors, thereby stimulating investment activities.

The accommodative monetary policy in Japan has proven particularly advantageous for the LBO market and mid-market buyouts, as it has reduced borrowing costs. Statistics indicate that PE deals in Japan have witnessed a substantial increase of 49% from 2021 to 2023, marking the highest growth rate among all countries in the Asia region.

Graph showing APAC deal value by country


In 2023, the total transaction size of domestic M&A deals in Korea dropped by 22% to $22.95 billion. This decline can be attributed to two main factors: legislative policy changes and foreign exchange rate fluctuations.

In January 2023, the Korean Financial Services Commission introduced new regulations requiring foreign investors to register before investing in Korean listed companies, along with trade reporting. Additionally, listed companies in Korea are now obligated to provide disclosures solely in Korean, creating a language barrier for foreign investors. These policy changes have led to a decrease in foreign investment interest and activity.

The high USD to KRW exchange rate has also negatively impacted outbound investment sentiment among Korean corporations. The unfavorable exchange rate has made overseas investments more expensive, thereby dampening the willingness of Korean companies to engage in outbound M&A transactions.

2024 Outlook – By Region 

Attractive Regions

In 2024, a rebound in M&A activities is expected due to cross-border expansion opportunities and potential monetary policy adjustments. High-growth countries, especially in Southeast Asia and the Gulf Cooperation Council (GCC) region, are anticipated to see an uptick in M&A deals as businesses seek to capitalize on expanding markets. Additionally, low-interest-rate countries like Japan are likely to attract attention due to the lower cost of capital, making them appealing choices for deal financing.


To address the economic challenges, the Chinese government in 2024 is shifting its focus from infrastructure development towards stimulating private consumption, leveraging households’ excess savings. This strategic pivot targets emerging sectors like smart homes, recreation, tourism, and sports events.

Additionally, China is recognizing the significant potential of the “Silver” Economy, aimed at addressing the needs of the aging population through tailored products and services. The government projects the silver economy to grow from 7 trillion to 30 trillion yuan by 2035, constituting around 10% of the total GDP.

Despite low export rates, China has made significant strides in the production and sales of new energy vehicles (NEVs), reaching record highs. NEV market penetration is steadily rising, supported by continuous improvements in infrastructure. The National Development and Reform Commission (NDRC) and related departments are actively working to accelerate policy optimization and measures promoting NEV consumption.

This strategic shift towards consumer-led growth and the silver economy is expected to drive M&A activities, investments, and innovation in sectors like healthcare, finance, consumer consumption, and infrastructure. These sectors will focus on developing products and services for the elderly and those related to NEVs.

Southeast Asia  

In 2024, the M&A and debt financing sectors are expected to continue their upward trajectory, with Singapore emerging as the primary source of deals. However, the International Monetary Fund predicts that the Philippines and Cambodia will see the highest rates of economic growth among Southeast Asian countries. This expansion creates opportunities for a rise in M&A transactions, particularly in the energy, healthcare, and ESG-related sectors.


According to S&P Global, India is forecasted to attain an average annual growth rate of 6.7% from 2024 to 2031, driven primarily by capital expansion in key sectors like healthcare, green energy, e-commerce, and financial services. Additionally, Indian investors are actively participating in smaller deals but with larger volumes in 2024. These sectors are anticipated to see potential deal activities “after the general elections [in India] early next year,” as mentioned by Rajat Mukherjee in an interview with Forbes India.

Japan & Korea

Looking ahead to 2024, the upward trend of M&A and LBO deals in Japan is expected to persist, bolstered by the government’s new guideline permitting unsolicited takeover bids, which fosters a more dynamic M&A landscape. Japan’s unique business environment, where approximately 90% of companies are family-owned, coupled with an aging, and shrinking population, contributes to the surge in M&A activity. About 57% of family-owned businesses in Japan face succession challenges, necessitating long-term planning for smooth leadership transitions, particularly in the small business sector. This significantly drives the demand for M&A and debt financing.

In the Korean M&A market, momentum is anticipated to pick up in the latter half of the year. This expectation arises from planned key interest rate cuts by major central banks, which will alleviate the cost burden for businesses in acquisition deals. Furthermore, major PE firms with significant available capital (dry powder) are well-positioned to capitalize on opportunities in the current cautious market environment. As the acquisition financing market gradually eases, target companies become available for sale at attractive valuations. Additionally, new entrants such as Middle Eastern and European sovereign funds, alongside other major global M&A players, are expressing interest in Korea’s M&A opportunities.

Gulf Cooperation Council (GCC)

While global economies elsewhere are still in the process of recovering in 2023, the GCC states have successfully navigated the global economic slowdown, due to the relaxation of OPEC+ oil production quotas. Looking ahead, the global GCC outbound tourism market is projected to grow at a CAGR of 13.6%, expanding from $18.3 billion in 2022 to $65.5 billion by 2032. This growth is anticipated to be driven by upcoming events in the GCC, including the 2024 Formula 1 Saudi Arabia Grand Prix, the 2030 Expo, and the 2034 World Cup. Consequently, substantial investments in tourism-related infrastructure such as hotels and transportation are expected throughout the projected period, from both public and private sectors.

Furthermore, countries across the GCC are actively seeking investment opportunities in AI technology, particularly in sectors like healthcare, finance, media, and technology. Additionally, the region is accelerating investment activities in green energy, leveraging their position as key leaders in oil production, and working towards achieving their decarbonization goals of net-zero carbon emissions by 2050. The commitment to sustainable development and the transition to cleaner energy sources create cross-border M&A opportunities.

2024 Trends & Opportunities

Interest Rate Projection

It is anticipated that the M&A market will rebound in 2024, albeit with a gradual and controlled slowdown. This expectation is based on the possibility of the Federal Reserve initiating rate cuts starting in the second quarter. With the core personal consumption expenditures (PCE) inflation, the Fed’s preferred inflation measure, likely to fall below 2.5% in the spring, it is anticipated that the Fed will implement its first rate cut during Q2 of 2024. Rate cuts of 75 to 100 basis points are expected in 2024, followed by an additional 150 basis points in 2025. These measures are intended to stimulate economic activity and create a more favorable environment for M&A transactions.

Global M&A Industry Trend

M&A activity is rebounding notably in the energy, technology, and pharmaceutical sectors, while sectors like healthcare, financial services, consumer retail, and industrial infrastructure are still in the process of recovery. Looking ahead, several subsector hotspots show promising prospects for M&A, including AI, semiconductors, electric vehicles, batteries and energy storage, biotech, space, consumer health, and insurance brokerage. Deep tech innovations are prevalent in many of these subsectors, driving significant technological advancements.

However, the investment landscape for deep tech companies is currently experiencing a decline in venture capital funding from $160 billion in 2021 to $40 billion in the first half of 2023 due to rising interest rates. Despite this, deep tech’s share of venture funding has remained stable at 20% of investors’ portfolios since 2019. Additionally, the average size of investments in deep tech has surpassed $100 million, indicating sustained investor confidence in the sector.

The United States and China lead in deep tech funding, with over 60% and 12% respectively, while Europe collectively accounts for 14%. Government support for the deep tech trend is also growing in countries such as Israel, Sweden, the United States, Singapore, and the United Kingdom, signaling increasing global interest and investment in deep tech ventures, particularly within these regions.

Graph showing deep tech investments funding distributionTable of technology group types and applicationsRise in Company Restructuring

In 2023, the increasing complexity of company portfolios, coupled with rising capital costs and external pressures, prompted a trend of strategic and financial restructuring through corporate separations. According to Deloitte’s report, divestiture activity in Asia, particularly in Japan, saw marginal growth in 2023. With a focus on reorganizing resources for healthier financial growth, it is expected that more companies will consider divestment as a strategic move through carve-outs and spin-offs. This rising trend spans various sectors, particularly within companies or segments perceived to have lower valuations. Consequently, these companies are seeking to divest these mispriced assets to pay down debts, fund working capital, or make capital expenditures, aligning their resources with core operations and growth initiatives. This shifting trend toward divestment presents a significant opportunity for M&A advisory services and creates favorable conditions for increased deal flow in 2024.

Graph showing divestment deal volumeLiquidation

In 2023, many countries are witnessing a significant surge in business insolvencies, as substantial amounts of excess cash are primarily concentrated among larger companies and specific industries like technology and consumer discretionary. Meanwhile, the net cash positions of businesses are declining faster than economic activity. This has resulted in over a 30% increase in business insolvencies across 11 countries, including the United States, Canada, the Netherlands, Sweden, France, Poland, Hungary, Japan, Australia, New Zealand, and South Korea. Sectors such as hospitality, transportation, retail, and construction are particularly affected. Global business insolvencies are expected to continue rising by 10% in 2024. By the end of 2024, the US, Italy, and the Netherlands are projected to experience the highest increase and return to pre-pandemic levels of business insolvency.


In recent years, fundraising activities have slowed down due to limited liquidity and high interest rates, hindering the ability to secure equity and debt financing. However, with the global economy showing signs of improvement and the potential for interest rate cuts in 2024, the exit market is gradually reopening, leading to a resurgence in fundraising activities starting from Q4 2023 and expected to extend into 2024.

According to BlackRock, the private capital industry’s “dry powder” has now reached the $4 trillion mark, indicating a significant amount of unallocated capital available for investment. While this presents opportunities for investment, it also poses challenges as investors become more selective and demand superior returns, given the growing number of companies seeking investments or funding.

With PE exit activity slumping in 2023, PE firms are facing a substantial backlog of maturing investments and actively seeking ways for exits, signaling an upswing in the number of anticipated M&A transactions. However, driven by the urgency to unlock invested capital, PE firms may be more open to considering lower valuations for their investment holdings.

Graph showing APAC focused funds dry powder

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2023 Global Markets Summary

2023 Performance & 2024 Outlook

2024 Trends and Opportunities

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