CHINA Law and Practice Contributed by: Shuting Qi, Han Kun Law Offices
1. Trends 1.1 M&A Market
restrictions, which now allow Chinese enterprises to acquire overseas unlisted assets via share swaps, rather than relying mainly on cash payments. 1.3 Key Industries High-Tech In 2025, the high-tech sector led China M&A activity. With semiconductor consolidation entering a phase focused on supply chain reinforcement and value syn - ergy, leaders started to pursue strategic integrations. Artificial intelligence and robotics also saw significant deals. Pharmaceuticals and Healthcare Healthcare M&A reached 64 deals totalling CNY110.38 billion in 2025. Deals centred on acquiring innovative drug pipelines, particularly ADC and dual-antibody platforms, and building integrated value chains. Financial Services Industry 2025 marked a watershed year for investment bank consolidation, characterised by policy-driven integra - tion aimed at building world-class investment banks. The primary techniques for acquiring a company in China can be divided by transaction subject into equi - ty acquisition and asset acquisition. • Equity acquisition refers to the purchase of shares or equity in a company. Upon closing, the acquirer becomes a registered shareholder of the target company. In cross-border transactions, the acqui - sition must also comply with applicable foreign investment filing requirements. 2. Overview of Regulatory Field 2.1 Acquiring a Company • Asset acquisition refers to the purchase of operat - ing assets of the target instead of equity, which helps acquirers isolate potential liabilities of the target and requires separate asset title transfer and creditor notification procedures.
According to PwC’s China M&A 2025 Review and Out - look , China’s mergers and acquisitions market record - ed a significant rebound in 2025. Total disclosed deal value exceeded USD400 billion, representing a 47% year-on-year increase. Deal volume surpassed 12,000 transactions, up nearly 20% compared with the previ - ous year. The drivers of the boom – including ongo - ing restructuring and consolidation, as well as strong liquidity – all remain intact, and PwC expects this activity to accelerate in 2026. 1.2 Key Trends SOEs Lead Mega-Deals In 2025, state-owned enterprises (SOEs) were the dominant force in China’s M&A market, leading many major M&A deals. From January to November 2025, there were 265 M&A deals involving SOEs, repre - senting a 14.22% increase compared with the same period in the previous year. Notably, three mergers exceeding CNY100 billion occurred, including the landmark integration of securities firms under the CIC group. The year also saw deals like China Shenhua’s CNY133.598 billion internal asset acquisition, which was the first to apply the newly introduced simplified review procedure for listed-company asset restruc - turing. This demonstrates that SOEs are using new policy measures to carry out complex M&A transac - tions more efficiently. Innovation in Deal Structuring China’s M&A structures became more flexible and market-oriented over the past 12 months. Many M&A transactions used targeted convertible bonds, acquisition loans and investment funds as sources of funding. Parties also turned to more flexible valuation terms, such as performance-linked adjustments and customised earn-out arrangements, in order to bal - ance risks and rewards. Alongside this, market and regulatory changes also led to a series of landmark “first ever” transactions, including the first cross-border share swap under the revised Measures for the Administration of the Stra - tegic Investment of Foreign Investors in Listed Com - panies. This deal benefited from the newly relaxed
308 CHAMBERS.COM
Powered by FlippingBook