DeepSeek Spurs China's M&A Rebound from Decade-Low
Deal News | Mar 01, 2025 | EIN
Mergers and acquisitions (M&A) in China's capital market are expected to experience a significant rebound this year from a decade-low, fueled by the rapid rise of start-up DeepSeek in the technology sector, according to financial experts. PwC forecasts that M&A activities could grow at a double-digit rate, while Natixis expects an increase of 10 to 15 per cent. Contributing factors include Chinese companies seeking overseas investments, private equity fund exits, and restructuring of state-owned enterprises. The government has been encouraging consolidations within sectors like brokerage and automotive industries. Last year, M&A transaction value fell to $277 billion, the lowest since 2014, with only 39 transactions surpassing $1 billion. In 2025, reforms in state-owned enterprises are anticipated to drive substantial transactions, particularly in regions such as Southeast Asia, and in sectors like technology, energy, and power.
Sectors
- Technology Sector
- Financial Services
- Automotive Industry
- Energy Sector
Geography
- China – The article focuses on M&A activities within China's capital market.
- Southeast Asia – There's mentioned interest in regional M&As especially within Southeast Asia.
Industry
- Technology Sector – DeepSeek's rise in the technology sector is a key driver of M&A activities.
- Financial Services – Investment banks like PwC and Natixis are involved in projecting and advising M&A strategies.
- Automotive Industry – State-controlled carmakers are considering mergers to remain competitive.
- Energy Sector – There's a noted interest in regional M&As within the energy and power sectors.
Financials
- US$277 billion – M&A transaction value in the previous year, highlighting a 16% decrease.
- 10-15% – Projected increase in M&A activities according to Natixis.
- Double-digit pace – Projected M&A growth by PwC.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| DeepSeek | Target Company | Company | A startup making significant impacts in technology and equity markets. |
| PwC | Corporate Finance | Company | Provided forecasts for China's M&A market potential growth. |
| Natixis | Corporate Finance | Company | French investment bank forecasting M&A growth and identifying key drivers. |
| Beijing | Government | Government | Encourages industry consolidations, impacting the M&A market. |
| Sam Sze | Advisory Leader | Person | PwC China South advisory leader commenting on M&A trends. |
| Miranda Zhao | Head of M&A in Asia-Pacific | Person | Manages M&A operations at Natixis Corporate and Investment Bank. |