PricewaterhouseCoopers: China's M&A volume reached a record high of 7,316 in the first half of the year and is expected to continue its strong momentum in the second half of the year

The Zhitong Finance App learned that PricewaterhouseCoopers pointed out that in the first half of this year, the number of mergers and acquisitions in China reached 7,316, an increase of nearly 30% over the previous year, a record high; total transactions increased 56% year over year to 241.6 billion US dollars, the best semi-annual performance since 2023. The significant recovery in the market was mainly driven by financial investors, and the volume and scale of related transactions increased by nearly 50% and 85% respectively.

Mei Liang, head tax partner at PricewaterhouseCoopers Trading Services, said that China's M&A market is expected to continue its strong momentum in the second half of 2026, and total transactions are expected to increase year over year. Structural growth is mainly driven by transactions such as hard technology integration, state-owned enterprise reform, and inter-agency transfers. At the same time, policy support and government guidance funds will continue to promote the integration of strategic industries. The recovery in valuations of listed companies will also provide support for share exchanges and acquisitions. The Hong Kong IPO market and tax relief measures are expected to further broaden exit channels and enhance the vitality of the private equity market.

In terms of very large transactions, the number of transactions worth more than 1 billion US dollars remained stable, reaching 27, the same as the same period last year. Among them, domestic strategic investment transactions accounted for 14, and more than half were led by state-owned enterprises. As many as 10 large-scale transactions during the period came from the high-tech sector, mainly in the AI, data storage, and semiconductor sectors.

In the same period, financial investors such as private equity and venture capital significantly accelerated their investment deployment. The number of transactions and transaction volume soared 170% and 86% year-on-year respectively. A total of 6 large-scale transactions were completed during the period, mainly involving the AI and semiconductor sectors.

In terms of exit and monetization, the overall private equity exit activity fell 9% year over year. Although the number of transactions exiting through mergers and acquisitions fell 16%, it still accounted for 70%, which was the main exit path. At the same time, the number of liquidity released and monetized through IPOs surged 50% year over year, with nearly half of them being carried out on the Hong Kong Stock Exchange. The Hong Kong Stock Exchange recorded 51 IPOs with a private equity background in the first half of the year alone, a record high for the same period. More than half were high-tech companies.

In the first half of the year, overseas mergers and acquisitions of Chinese companies showed obvious characteristics of “volume decline and price increase” — the number of transactions was lower than the same period last year, but the average transaction size increased significantly. The total amount of overseas mergers and acquisitions during the period reached 20.2 billion US dollars, and a total of 92 transactions were completed. A total of 4 large-scale transactions were recorded, up from 3 in the same period last year. Judging from the distribution of target industries, healthcare, raw materials, and high technology rank in the top three in terms of transaction volume.