SINGAPORE Trends and Developments Contributed by: Terence Quek, Benjamin Cheong and Favian Tan, Rajah & Tann Singapore LLP
The continued prevalence of deals in the field of technology has been a common feature of the M&A landscape, both in Singapore and globally. According to the Singapore Digital Economy Report 2025 pub- lished by the Infocomm Media Development Authority (IMDA), in 2024, the nominal sum of value added of Singapore’s digital economy reached SGD128.1 bil- lion, accounting for 18.6% of GDP, up from 18.0% of GDP in 2023. Thus, Singapore’s digital economy now accounts for more than SGD1 of every SGD6 of GDP. Between 2019 and 2024, the sum of value added for the digital economy grew at a compounded annual growth rate (CAGR) of 12%, higher than the 7.3% recorded for nominal GDP growth. More than two-thirds of Singapore’s digital economy came from non-information and communications sectors. This provides evidence that Singapore’s digital growth is not just driven by tech companies, but by digitalisation across all industries. Trends and Developments Shaping M&A The M&A landscape in Singapore has been driven by market forces arising from global developments and domestic policy. Here, some of the main trends shap- ing Singapore’s M&A scene in 2025 are explored. US tariffs The cautious M&A market is largely due to the US tariff threats, ongoing since early 2025, which have changed trade patterns and heightened policy uncer- tainty, impacting M&A in the Asia-Pacific region – including Singapore. The tariffs on most imports to the USA, including elevated, country-specific and sectoral rates, have injected volatility into earnings forecasts for Asia- exposed businesses. In early 2025, this resulted in front-loaded activity to beat tariff deadlines, followed swiftly by a dampening effect on M&A transactions. However, companies seeking to navigate these geo- political challenges may also look to M&A as a strate- gic tool in pivoting to “risk-based” deal theses: diver- sifying production footprints away from single-country exposure, acquiring complementary capabilities that reduce tariff incidence and executing carve outs of US-exposed business lines.
At the ground level, the US tariffs have had a practical impact on deal structures and terms, including wid- er bid-ask spreads, increased use of earn-outs and deferred consideration to bridge tariff-driven forecast- ing risk, greater reliance on completion accounts over locked box in tariff-exposed sectors, and increased scrutiny of rules of origin and export controls embed- ded in transaction diligence and documentation. Amidst the global uncertainty, Singapore has been increasingly positioned as a safe harbour for capital and headquarters relocations. Relative to its neigh- bours, Singapore’s exposure to US tariff risks is miti- gated by the 10% baseline rate imposed, its role as a regional financing and headquarters hub, and diversi- fied free trade agreements. It was reported that front loading ahead of tariff imple- mentation supported growth in Singapore in early 2025. In M&A, this has translated into steady inbound interest in Singapore assets and increased use of Sin- gapore platforms to acquire and manage Association of Southeast Asian Nations (ASEAN) operations. As a sign of this, family offices and funds have increased their presence in Singapore. As US tariffs persist and rates fluctuate, deal-makers are expected to stay cautious through 2026. Despite ongoing uncertainty, Singapore will likely benefit from relocations, new funds and manufacturing growth, even as large industrial deals slow. AI-led deal-making The rise of AI and its increasing ubiquity in commerce has been one of the most prevalent running themes in the last few years, following the launch of genera- tive AI platform ChatGPT in 2022, and shows no sign of loss of momentum. In the context of M&A, inves- tor interest in the acquisition of AI data and analytics capabilities has been a driving factor behind deal- making, while AI itself has found a place across the M&A life cycle via emerging AI tools. In Singapore, AI is influencing domestic M&A in two self-reinforcing ways. Firstly, a growing pipeline of AI-enabled companies is emerging from Singapore’s ecosystem, supported by accelerators and cloud partnerships. This creates buyout and growth invest-
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