• Japanese outbound M&A in Q2 2022 fell by 26% in volume and 51% by total value, compared to Q1 [14], driven by macro instability and a 20-year low for the JPY,
  • While this is in line with the pan-Asian slow-down of outbound investment activity, comparatively Japan remains the most acquisitive country in the region across all sectors (except Consumer, Leisure & Retail sector) [15]
  • Industrials has become the top outbound sector – up from an 18% share of deals in Q1 [16] - but this is a result of declining activity across other verticals, with volumes overall remaining flat
  • Technology & Software, previously the top sector, fell from Q1’s record 35% share of total [17] driven by the uncertainty caused by the geopolitical climate [18]
  • For Japan’s outbound target regions, Europe has seen the highest growth, more than doubling from the previous quarter to 15% of the total [19], as relaxed Covid-19 regulations released pent-up demand, coupled with a desire for growth [20]
  • Inbound acquisition of Japanese companies by foreign nationals has hit a new high of c. USD 9.5BN for H1 2022 - an increase of 34.3% from the same period last year and the second highest results in 15 years, with half of the targets being listed companies [21]
    • This is in part driven by an increase of Western private equity firm activity in Japan - fuelled by corporate disposals and carve-outs, and the weakened yen [22]

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  • The World Bank predicted China’s real GDP growth to slow sharply in 2022 – to 4.3% [23]. This was attributed to the economic damage from Omicron outbreaks and prolonged lockdowns in parts of China from March to May [24]
  • However, growth momentum is expected to rebound in the second half of 2022, helped by aggressive policy stimulus to mitigate the economic downturn [25]
  • Against this backdrop, China’s overall outbound M&A activity in Q2 2022 remained stable in volume, reaching 54 deals vs 53 in Q1 [26]. However, deal value was up 115% quarter-on-quarter, with a total value of EUR 13.7BN [27] due to the focus on technology targets [28]
  • As demonstrated below, Technology & Software and Business & Tech-Enabled Services continued to lead the way in deal volume in Q2, following the easing of regulations as China softens its attitude toward big tech companies [29] – representing 44% of all announced M&A deals, followed by Industrials (19%)[30]
  • Chinese investors favoured Europe and Asia equally as outbound target regions, each representing one third of total outbound activity, whereas the US continued to receive lukewarm attention due to the constant US-China tensions
  • Looking forward, restoration in the post-pandemic era remains the focus of the current economy [31] which we anticipate will see an uplift in M&A activity,– buoyed by China's manufacturing activity expanding at its fastest rate in 13 months in June as factories raced to meet recovering demand once lockdown restrictions were lifted [32]
  • As ‘ESG awareness’ grows in China, we expect Chinese investors to drive activity in ‘green’ sectors in the coming months


  • Indian outbound M&A in Q2 2022 increased by 5% on last quarter, reaching 21 deals [33], as despite the continued geopolitical uncertainty and economic disruption, companies aimed to position themselves for a changing technological landscape [34]
  • The Technology & Software sector grew significantly during Covid as the world moved to ‘virtual delivery’ – taking a 45% share of deals last quarter and remaining level at 43% this quarter [35]
  • India investors favour Europe as an outbound destination – it being the most popular region in Q2 and Q1 at 42%, followed by North America at 25% in Q2 2022 and Q1 2022 [36], as countries like France are lowering the barriers to entry [37]
  • India’s outbound M&A scene continues to accelerate with ‘transformative’ deals representing a higher proportion – driven by digitalization, capability enhancement and business model disruption. Indian IT services & technology companies Cyient, Wipro, Lenskart, and Byju’s were amongst the largest bidders in Q2 2022 [38] [39]
  • M&A in India has seen an influx of domestic deals this quarter, accounting for c. 50% of all volume [40]- demonstrating that Indian buyers have found significant opportunities driven by the rapid growth of India’s market - contrary to outbounds which are more targeted and strategic in nature

Southeast Asia

  • Southeast Asian outbound M&A in Q2 2022 decreased by 12% quarter-on-quarter in the face of the current macroeconomic headwinds, reaching 53 deals [41]
  • Deal activity was strongest in Technology & Software, Industrials, and Energy & Infrastructure, which aligns with regional digitalization and development trends, accounting for 60% of M&A deals collectively [42]
  • In terms of outbound destination, Asia grew significantly from 34% of total deal value in Q1’22 to 72% in Q2’22, displacing Europe as the most popular region compared to Q1’22 [43], driven by the impact of the current conflict
  • Beyond Q2, investors are adopting a cautious approach, balancing optimism from the lifting of Covid-19 restrictions in SEA economics and the uncertainty in the global macro environment, which we believe will see a decrease in investor’s risk profile to help mitigate this balance

South Korea

  • The continued impact from macroeconomic environment changes, meant a slowdown of M&A activity in Korea, for two consecutive quarters (66 in Q2 2022 and 76 in Q1 2022) [44]
  • Technology & Software and Industrials kept their lead with 24% and 33% of total deals respectively [45], due to continued consolidation by large conglomerates eg SK Group [46]
  • The continued preference towards Industrials and Technology related deals will likely continue in the near future; however, investors have notably been turning towards companies that are profitable now rather than companies that will turn profitable in the distant future, as investors look to mitigate risk in current macroeconomic climate
  • North America’s share of outbound deals fell from 67% to 38% this quarter, however we anticipate investors will continue to prefer North America given the plethora of targets – this dip and Asia’s share stood at a similar level at 29% vs. 27% from the previous quarter. The outbound deals to Europe rose to 19% vs. only 7% last quarter [47]

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