PwC: China’s M&A market posts strong rebound in 2025—Transaction value surges 47% year-on-year

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Hong Kong, 10 February 2026—PwC today released its China M&A 2025 Review and Outlook. China’s mergers and acquisitions (M&A) market recorded a significant rebound in 2025. Total disclosed deal value exceeded USD 400 billion, representing a 47% year-on-year increase. Deal volume surpassed 12,000 transactions, up nearly 20% compared with the previous year. The drivers of the boom—including ongoing restructuring and consolidation, as well as strong liquidity—all remain intact and PwC expects this activity to accelerate in the coming year.

The report notes that the strong rebound in China’s M&A market was primarily driven by domestic strategic investments. Over the year, these accounted for 3,639 M&A transactions with a total deal value of USD 239 billion (+83% year-on-year). There were 34 mega-deals in this segment. More than half were led by state-owned enterprises, with a strong focus on national strategic industries such as semiconductors, artificial intelligence and new energy. This reflects deepening industry consolidation and upgrading under policy guidance.

“The robust growth in the domestic M&A market in 2025 was underpinned by a recovery in capital market valuations and the revival of the IPO market. These provided a solid pricing foundation and strong liquidity for transactions,” says Matthew Phillips, PwC China Financial Services Industry Leader. “Industry consolidation, ever faster technological breakthroughs and the increasing exit needs of financial investors also boosted deal activity.”

Among financial investors, Private equity (PE) funds completed 1,189 purchases with a total deal value of USD 139 billion, representing year-on-year increases of 14% and 16% respectively. Fourteen PE mega-deals were closed during the year, of which eight were led by state-backed funds. Capital was primarily allocated to high-tech, industrial products and healthcare sectors. PE fund exit activity was also lively, with M&A exits accounting for the largest share. There were 70 IPO exits on the Hong Kong Stock Exchange during the year—a record high. PwC predicts that approximately 150 companies will successfully list in Hong Kong in 2026, raising between HKD 320 billion and HKD 350 billion.

The venture capital (VC) market delivered an outstanding performance, driven by the boom in frontier and other technologies, such as AI, AI-enabled applications and robotics. Transaction volume reached a record high of 7,382 deals, with more than 3,000 in the high-tech sector, accounting for 42% of the total. This provided strong support for industrial transformation and upgrading.

“The number of newly-established funds reached a record high, while RMB-denominated funds strengthened their dominant position, providing ample capital to the market,” says Lear Mei, PwC Hong Kong Tax Partner. “Investments focused on strategic sectors such as high technology and healthcare, aligning with the national agenda for industrial upgrading. Exits were driven by both M&A transactions and IPOs. The Hong Kong Stock Exchange became an important exit venue for emerging industries such as biopharmaceuticals. This effectively eased long‑standing exit pressures.”

Chinese Mainland enterprises announced 272 outbound M&A transactions during the year (+5%), with deal value reaching USD 23 billion (+88%). Seven mega outbound M&A transactions were completed. Of these, four were concentrated in the European consumer goods sector, reflecting the growing demand among domestic consumers for high‑quality imported products and the growing confidence of a new breed of Chinese multinational enterprises.

Looking ahead to 2026, PwC sees multiple positive factors that will continue to drive growth in the M&A market. Accelerated domestic industrial upgrading, a potentially more accommodative refinancing environment for A-share market leaders, and deeper progress in SOE reform and listed company consolidation are expected to encourage industry consolidation. The backlog of private equity projects awaiting exit, combined with the recovery of valuations in Hong Kong’s capital market, will further stimulate activity.

“As industrial development and the capital environment continue to improve, PwC sees strong M&A growth in the coming year,” says Mr Phillips. “Chinese enterprises are also expected to deepen their outbound expansion in Southeast Asia and Europe, strengthening supply chains and enhancing global competitiveness.”

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Download the report: PwC’s China M&A 2025 Review and Outlook