China M&A 2026 mid-year review and outlook
Overview
PwC China M&A 2026 mid-year review and outlook report shows that, driven by the dual tailwinds of capital markets and favourable policies, the Chinese mergers and acquisitions market rebounded strongly in the first half of 2026, with a total of 7,316 transactions, up nearly 30% year-on-year (YoY) setting a new historical record. Meanwhile, total transaction value grew by 56% YoY to US$241.6 billion, marking the best half-year performance since 2023.
China M&A outlook for the 2nd half of 2026
- Exit remains difficult for PEs, with increasing pressure to generate cash distributions.
- Premium valuations for high-quality strategic assets may delay transactions or encourage minority investments.
- Headline market value may remain dependent on a relatively small number of mega-deals.
- Outbound activity remains vulnerable to investment screening, export controls, tariffs and broader geopolitical developments.
- Policy support and government-backed capital will continue to stimulate consolidation in strategically important sectors.
- Stronger listed-company valuations should support share-funded acquisitions, asset injections and industrial-chain integration.
- SOE reform, corporate portfolio reviews and MNC carve-outs should increase the supply of actionable transactions.
- The Hong Kong IPO pipeline provides a more credible exit route, particularly for technology and healthcare assets.
- Hong Kong’s 2026 tax amendment broadens carried interest concessions to a wider spectrum of alternative asset managers, will boost HK’s PE resourcing and deepen deal origination and execution capacity.
- Technology, AI and AI enablers: Semiconductors, AI infra, data storage, robotics, power, grid, cooling infrastructure
- SOE restructuring, listed-company M&A
- Liquidity-led transactions: sponsor-to-sponsor, GP-led secondaries
- MNC Carve-outs & partnerships: divestitures, domestic strategic alliances
- Selective outbound investment: resources, healthcare, brands, supply-chain localisation
We expect China’s M&A market to sustain its momentum through the second half of 2026, with both transaction value and volume projected to grow year-on-year.
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