• Japanese outbound M&A in Q1 2022 increased by 53% QoQ since 2021, reaching 87 deals[1]
  • Technology & Software - which had already seen a significant increase in market share during the pandemic, at 32% of total (Q4 2021) - has further extended its lead to reach 38%,[2] fuelled by renewed corporate appetite in outbound deals coupled with the rising interest in Japan’s tech innovation[3]
  • In terms of outbound regional targeting from Japan, appetite for the US grew by 70% from Q4 2021[4] - overtaking Europe to be the most popular region
  • We have witnessed Japanese activity continue to accelerate with an increase in ‘transformative deals’ - driven by digitalisation, decarbonisation, business model disruption, and the continued shrinkage of the domestic market – to now represent a higher proportion of Japanese deal flow. This is in contrast to the traditional corporate re-organisations that we have seen previously in the market
  • We believe an M&A ‘boom’ in outbound deals will likely continue for the foreseeable future, staying at or just below the historically high level seen in 2021, both in terms of volume and value, with the prominence of outbound deals accounting for as much as 40% of all deals in terms of value[5]


  • China’s Q1 2022 GDP growth of 4.8%[6] slightly surpassed expectations, however, the Covid-19 outbreaks and strict new anti-virus controls implemented in March have since disrupted production and impacted consumption (down 3.5% YoY)[7] in some major cities, such as Shanghai. In contrast, though consumer spending was lower, industrial production still added 5% YoY in March, compared with 7.5% in the first two months[8]
  • Supply chain disruptions, geopolitical headwinds, uncertainties in regulations and large amounts of private debt accumulated during the pandemic, dampened the growth of China’s overseas M&A activities with only 53 total outbound M&A transactions announced in Q1[9]
  • The top sectors that attracted the largest number of M&A deals include Technology & Software, Healthcare and Business & Tech-Enabled Services, which are described as more Covid-resilient
  • As seen below, Europe, Asia, and the US were still the key geographies of interest for Chinese acquirers – the continuing US-China tensions paved way for Europe and Asia to take the lead

South Korea

  • After enjoying record levels of M&A in 2021[10], deal flow in South Korea is expected to remain strong in 2022
  • Domestic supply chain management issues - especially raw material for industrial products - have been significant; driving outbound M&A in the materials and component sectors[11]
  • As illustrated below, Technology & Software accounted for third of all outbound activity – likely driven by renewed appetite for investment and innovation
  • The US was the largest single country destination for outbound activity (as shown below), accounting for two thirds of all outbound activity.[12] We expect the US to continue its trend as an attractive region for South Korean investors in 2022

Southeast Asia

  • Companies continue to leverage M&A to build agility and resilience against the prevailing headwinds. We expect 2022 will bring more vertical-integration deals:
    • upwards - to secure key raw materials or components; and
    • downwards - to control how products are distributed
  • We have observed that issues relating to raw materials, labour, and shipping container shortages are causing a turn towards onshoring / nearshoring M&A opportunities to reduce lead times
  • Prior to the pandemic, we believe due diligence in M&A rarely looked at supply chain health, but today, it is likely a weak supply chain (without adequate diversity in origin or lack of alternatives in shipping & transport options) could represent major risk, with potential to result in a lower valuation
  • We believe investors use ESG criteria to assess risks and to identify value creation opportunities; this applies to both corporates as well as PE funds, and we expect to see increased M&A activity in industries that are transitioning to new business models and technologies, eg energy storage or solutions to create a more sustainable circular economy
  • Equally, it is likely high ESG risks may be penalised against the discount rate – in some instances - cash flow adjustments related to remedial costs to cover ESG risks


  • India’s unicorn boom continues in 2022, ranking India fourth globally in terms of number of unicorns [13]
  • New age sectors such as fintech, media tech, HR tech, tech logistics, edtech, blockchain, AI, social commerce, etc. have – in our view – been key areas for M&A activity in 2022 so far. We expect this to continue given India’s digital adoption and growth outlook[14]
  • India’s outbound acquisitions continued to be dominated by Technology & Software, particularly IT services & technology companies (eg Tech Mahindra[15] and Persistent Systems[16]), as they pursue M&A to bolster capabilities in cloud, digital marketing, as well as in non-traditional IT sectors
  • The US has always been the dominant geography for Indian acquirers especially for Technology & Software companies; however, we believe Indian companies have started acquiring more strategically, for example, with a view to improved technology & market share in other geographies, such as South America and the Philippines

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