Fewer but bigger deals push Hong Kong M&A to 10-year peak

Companies are focusing on scale, efficiency, and long-term positioning.

Hong Kong’s deal activity surged to a decade high of $473.58 billion (US$60.33 billion) in the first five months—more than double the level a year earlier—as companies chased fewer but bigger transactions.

Volume rose 12.7% year on year to 382, with businesses pursuing strategic deals to build scale and resilience amidst regulatory shifts and economic pressure, Tan said. Elaine Tan, deals intelligence senior manager at the London Stock Exchange Group (LSEG), told Hong Kong Business. 

“A more cautious M&A (mergers and acquisitions) climate influenced by the current tariff environment hasn’t deterred major and big-ticket deals from being announced,” she said in an emailed reply to questions. “[They] continue to move forward, driven by broader strategic imperatives.”

Hong Kong’s deal value in the first nine months of last year fell 38.6% year on year to $413.68b (US$52.7b), the lowest since 2012, according to LSEG.

Craig Loveless, a partner at global law firm Norton Rose Fulbright, said the trend toward larger deals is playing out across the global M&A market.

“Smaller transactions might be facing more hurdles or being put on hold altogether,” he told Hong Kong Business in an email reply.

Charles Bremner, a partner at Norton Rose Fulbright, said economic uncertainty and potential synergies are also pushing companies to prioritise larger M&A deals.

“Rather than pursuing a higher volume of smaller transactions, they tend to focus on larger deals that offer clear strategic value, such as market consolidation, access to new technologies or expansion into new geographies,” he told Hong Kong Business via email.

“Larger deals often promise greater synergies—for example, cost savings, revenue enhancements or operational efficiencies—that can help justify the investment and provide a clearer path to value creation,” he added.

The industrial and power sectors dominated Hong Kong’s M&A scene, accounting for 71% of the total deal value, Tan said. Ports, logistics, and automotive transactions boosted industrials to $174b (US$22.2b), 14 times higher than a year earlier.

A key transaction in the industrial space was Geely Automobile Holdings Ltd.’s $18.2b (US$2.32b) takeover of Ningbo-based ZEEKR Intelligent Technology Holding via a stock swap. Energy and power deals skyrocketed to $161b (US$20.51b), a 75-fold increase from the year-ago level.

Deals in the energy and power space included Xinneng (Hong Kong) Energy Investment Ltd.’s $78.7b (US$10.03b) privatisation of ENN Energy Holdings Ltd., and SPIC Yuanda Environmental Protection Co. Ltd.’s $67.59b (US$8.61b) takeover of Wuling Power Corp. Ltd. from China Power International Development.

Risk-off deals

Tan said retail also made a strong comeback, rising almost six times year on year to $37.68b (US$4.8b). Deals included Xinda Motors Co. Ltd.’s $23.39b (US$2.98b) acquisition of a 67% stake in China ZhengTong Auto Services Holdings Ltd. and Paragon Shine Ltd’s acquisition of a 79% stake in Wanchai-based Sun Art Retail Group Ltd. for $10.44b (US$1.33b).

Values of deals under $7.85b (US$1b) and those in the $7.8b to $39.3b (US$1b to US$5b) range dropped 9% and 30% year on year, respectively, according to Tan.

Bremner said “risk-off” deals are gaining momentum in Hong Kong, where companies are acquiring smaller firms that complement their business or industry. He added that several deals involved companies focused on Southeast Asia and the Middle East.

As of 17 June, one deal between a Hong Kong and Southeast Asian company had been completed, while another was pending, Tan said.

Hong Kong’s Affinity Equity Partners has acquired Indonesia’s PT Yupi Indo Jelly Gum through PT Confectionery Consumer Products, whilst Thailand’s CPF Investment Ltd. is about to buy Hong Kong–based CP Pokphand Co.

Neha Singh, chairperson and managing director at Tracxn Technologies Ltd., said the US is the leading acquirer in Hong Kong’s M&A market. There is also deal activity in Europe from Germany, France, and Italy, whilst Singapore is an active player in Southeast Asia.

Tan said Hong Kong’s biggest M&A transaction to date involved a consortium led by New York-based BlackRock, Inc. and Global Infrastructure Management LLC, along with Switzerland-based Terminal Investment Ltd. Sarl.

The investor group bought an 80% stake in Hutchison Port Holdings Sarl and Hutchison Port Group Holdings Ltd. from Kowloon-based CK Hutchison Holdings Ltd. It  also acquired a 90% interest in Panama Ports Co. from Hutchison Port Holdings.

The value of the two transactions was estimated at $150.7b (US$19.2b) Tan said.

Bremner expects to see more deal activity in Hong Kong as it boosts its capital and liquidity pool.

By late May, Hong Kong funds raised from new share offerings had reached $76b, more than seven times the tally a year earlier.
Public listings would likely allow investors to exit and fund fresh acquisitions, Singh said.