Executive Summary
In the first half of 2026 (January–June), the observed number of of cross-border M&A by Japanese companies across Asia-Pacific (APAC) reached 182 (of which 91 in the second quarter; Syntax Partners research, on an observation-date basis. On a deal-count basis; transaction values are outside the scope of this tally. The same applies hereafter). This is just over half of the 361 deals recorded for full-year 2025, and the pace on a count basis is tracking broadly in line with the prior year. While the overall volume shows little change, comparing the composition with the prior full year reveals two shifts in the substance of deals.
First, the center of gravity of the deal count is moving from the supply side to the demand side. In full-year 2025, the composition leaned toward the supply side, with Information & Communications (18.0%) in first place followed by Chemicals & Materials (13.9%), while Consumer & Retail remained at 9.1% (fourth place). In the first half of 2026, this Consumer & Retail sector rose to 13.2% (24 deals) to take the top spot, followed by Information & Communications (22 deals, 12.1%). The change at the top is a shift in count composition (this review does not tally transaction values), and it shows that the center of momentum in deal creation is moving from supply-side themes—supply-chain realignment and economic security—toward the demand side of domestic demand in growth markets and digitalization.
Second, the APAC-wide configuration in which investment-oriented transactions (acquisitions, minority investments and capital alliances) are the mainstream is unchanged, and the point that China alone is the exception—being in a phase of interest-streamlining—also continues from the prior year. First-half investment-oriented transactions accounted for 124 deals (68.1%), and across India and the major ASEAN countries, with Singapore (38 deals, 20.9%) as the investment gateway, the weight of divestment-oriented transactions (sales and partial transfers) in which Japanese companies let go of interests they hold is small. China alone, by contrast, saw divestment-oriented transactions reach 13 of its 24 domestic deals (54%)—the only major APAC market where divestment-oriented transactions exceed investment-oriented ones. Of the 33 divestment-oriented transactions in the first half, roughly four in ten—13 deals—were concentrated in China. This divestment-oriented predominance is a continuation from the prior full year (roughly two-thirds of domestic deals were divestment-oriented) and is not a sudden change. While China streamlines interests in commodity manufacturing, Japanese companies have not stopped investing in growth markets. Streamlining and investment are advancing simultaneously.
This review analyzes industry- and country-level trends around these two shifts, with the first-half cumulative tally as its principal axis. All cases are based on observed M&A and capital-alliance transactions, and, as indications of the most recent moves, the review primarily cites Q2 deals.
M&A Deal Tally (First-Half 2026 Cumulative, January–June)
Deals by Industry
| Industry | Deals | Share |
|---|---|---|
| Consumer & Retail | 24 | 13.2% |
| Information & Communications | 22 | 12.1% |
| Financials | 20 | 11.0% |
| Electronics | 19 | 10.4% |
| Chemicals & Materials | 17 | 9.3% |
| Professional Services | 12 | 6.6% |
| Logistics | 10 | 5.5% |
| Transportation Equipment | 10 | 5.5% |
| Media & Entertainment | 10 | 5.5% |
| Industrial Services | 8 | 4.4% |
| Energy & Resources | 7 | 3.8% |
| Real Estate | 7 | 3.8% |
| Machinery | 6 | 3.3% |
| Healthcare | 5 | 2.7% |
| Other Manufacturing | 3 | 1.6% |
| Public Infrastructure | 2 | 1.1% |
| Total | 182 | 100.0% |
(Figure 1) First-half 2026 (January–June) M&A deals by Japanese companies in APAC (cumulative by industry, 182 deals).
Deals by Country/Region
| Country/Region | Deals | Share |
|---|---|---|
| Singapore | 38 | 20.9% |
| China | 24 | 13.2% |
| South Korea | 19 | 10.4% |
| India | 17 | 9.3% |
| Taiwan | 16 | 8.8% |
| Malaysia | 15 | 8.2% |
| Thailand | 12 | 6.6% |
| Hong Kong | 11 | 6.0% |
| Vietnam | 11 | 6.0% |
| Indonesia | 8 | 4.4% |
| Philippines | 7 | 3.8% |
| Australia | 3 | 1.6% |
| Pakistan | 1 | 0.5% |
| Total | 182 | 100.0% |
(Figure 2) First-half 2026 (January–June) M&A deals by Japanese companies in APAC (cumulative by country, 182 deals).
Deals by Transaction Type
| Transaction Type | Deals | Share |
|---|---|---|
| Acquisition | 66 | 36.3% |
| Investment | 49 | 26.9% |
| Sale | 28 | 15.4% |
| Capital Alliance | 9 | 4.9% |
| Joint Venture | 7 | 3.8% |
| Other | 6 | 3.3% |
| Fundraising | 6 | 3.3% |
| Partial Transfer | 5 | 2.7% |
| Merger | 5 | 2.7% |
| Reorganization | 1 | 0.5% |
| Total | 182 | 100.0% |
(Figure 3) Breakdown by transaction type for the first half of 2026 (January–June) (cumulative, 182 deals). Investment-oriented transactions (acquisitions, minority investments and capital alliances) account for 124 deals (68.1%), and divestment-oriented transactions (sales and partial transfers) for 33 deals (18.1%).
1. Industry Trends: A Structural Shift in Investment Themes
Japanese companies’ APAC investment splits into two layers: a demand side centered on Consumer & Retail and Information & Communications (capturing growth markets), and a supply side anchored in Electronics and Chemicals & Materials (supply-chain realignment and economic security).
Consumer & Retail: The “Capturing Domestic Demand” Logic Behind the Top Sector
At 24 deals (13.2%) cumulatively in the first half, Consumer & Retail took the top spot by industry. With domestic consumption stagnating amid a shrinking population, for specialty retailers, food makers and household-consumer-goods companies, using M&A to “buy time” in capturing the demand of a growing local middle class is far more rational than building store networks and brands from scratch. Q2 cases bear out this preference. In eyewear, Intermestic acquired Zoff I Singapore (Singapore), which franchises the “Zoff” brand, while a JINS HD subsidiary acquired an eyewear-sales business in the Philippines. In sports and footwear, XEBIO HD acquired Australian golf-equipment retailer Drummond Golf, and an ABC-Mart subsidiary took over the “FOLDER” shoe select-shop business from South Korea’s E-Land World. In each case, these are “shortening entry time” transactions that internalize wholesale an already established local store network, customer base and brand recognition. In the food-and-household field as well, Ajinomoto proposed taking its Malaysian subsidiary Ajinomoto (Malaysia) fully into ownership, Itochu invested in a Hong Kong subsidiary of Nissin Foods HD, and Umios acquired pet-food maker Pet World International in Malaysia—advancing the simultaneous securing of supply functions and local brands. In addition, there was reverse-direction capital movement in which Japanese consumer brands became investment targets for extra-regional capital, such as Singapore’s sovereign fund GIC investing in Sazaby League—leaving the consumer field energized in both directions.
Information & Communications: From Communications Infrastructure to Software and AI Applications
At 22 deals (12.1%) cumulatively in the first half, Information & Communications ranked second. Deals in this field are shifting from capital-intensive communications infrastructure (submarine cables, data centers) toward software, DX and AI applications. Behind this lie the further advance of industrial digitalization driven by AI and cloud adoption, and the high return on investment of nimbly acquiring technology, talent and market access through small-ticket minority stakes.
Among Q2 cases, KDDI Agile Development Center made software developer Vietlink Solutions (Vietnam) a subsidiary, Vpon Holdings brought AI ad-technology firm Tagtoo (Taiwan) into its group, and Yogiyo Company acquired Loco Partners (South Korea), operator of the “Relux” accommodation-booking service. Digital investments via funds and angels were also plentiful, with observed investments in FORMAS.AI, which is rebuilding the architectural-design process, and AI-cat app maker Meowster Innovations (both Singapore). Characteristically, many of these were minority investments and early-stage investments without the acquisition of control, with Information & Communications leading digital investment via CVC and funds.
Electronics and Chemicals & Materials: A Supply-Side Realignment Where Economic Security and Commodity Streamlining Intersect
Electronics (19 deals cumulatively, 10.4%) and Chemicals & Materials (17 deals, 9.3%) are the leading sectors mirroring supply-side realignment. Common to both is that investment and streamlining are running in parallel within the same sector—a reflection of two opposing forces working simultaneously: the economic-security imperative surrounding semiconductors, critical minerals and advanced materials (investment in high-value-added, strategic areas) and capital recovery from commodity and mature areas (streamlining of low-margin sites).
On the investment side, TDK acquired lithium-ion battery maker Linergy Power in Malaysia, deepening its position in decarbonization- and EV-related strategic areas such as batteries and power electronics. On the streamlining side, the moves are concentrated in China. Of China’s 13 divestment-oriented deals in the first half, the largest share—5 deals—were in Electronics, with Maxell (Wuxi), Ricoh (Shenzhen), ROHM (Dalian), Tamura (Foshan) and ASTI (Zhejiang) successively transferring their entire stakes in Chinese subsidiaries to local companies (see China under country trends for details). In other words, the streamlining in Electronics is not a contraction of the sector as a whole but is limited to China’s commodity-component sites. In Chemicals & Materials, Mitsubishi Chemical transferred its entire stake in a Taiwan MMA-monomer business to its JV partner, and Toray and Mitsui & Co. transferred shares in Soda Aromatic to a South Korean company—advancing the swapping of commodity and non-core businesses. These are not cyclical slowdowns but part of peacetime practice, reshuffling the portfolio on the criteria of capital efficiency and strategic fit.
Financials: Acquiring Fund Functions Centered on Singapore, the Confluence of Capital
Financials (20 deals cumulatively, 11.0%) is a sector where concentration in Singapore stands out. Japanese financial institutions, leasing companies and operating companies prefer, before taking the risk of direct investment in growth markets, to first acquire diversified exposure through funds (fund-of-funds, VCC, LP investments). In Q2 as well, there was a succession of such moves: Nippon Thompson’s LP investment in a fund-of-funds operated by Cross Capital, Fuyo General Lease’s investment in TNB Aura Fund III, Sumitomo Mitsui Trust Bank’s investment in Keppel Education Asset Fund II, and Bitbank Ventures’ investment in a crypto-asset-focused quant fund. This is an “indirect approach” that connects to the deal-sourcing capability and networks of local managers while avoiding concentration risk in a single asset, made possible by the concentration of regulation, taxation and talent that Singapore offers.
Professional Services, Energy and Real Estate: Penetration into the Operations and Assets of Growth Markets
In Professional Services (12 deals cumulatively, 6.6%), the internalization of talent and customer bases advanced in labor-intensive, locally-knowledge-dependent areas such as consulting, BPO and IT services. In Q2, BeeCruise acquired contact-center AI-agent firm Radiant Communication in Malaysia, and Dirbato brought SAP-focused staffing and IT-consulting firm Icon Consulting Holdings into its group in Singapore. In Energy & Resources (7 deals) and Real Estate (7 deals), interest in the real assets and infrastructure of growth markets rose: Chubu Electric Power invested roughly ¥23 billion in India’s Continuum Green Energy, Nishi-Nippon Railroad acquired a 49% stake in Vietnamese affordable-housing developer Nam Long Apartment Development, and the Development Bank of Japan participated in an HDFC-affiliated housing-development fund in India. Renewable energy, housing and infrastructure are areas tied to the long-term structural demand of urbanization and decarbonization in growth markets, with a high affinity for investment-oriented approaches.
2. Country and Regional Trends
That investment-oriented transactions are the mainstream is common across all of APAC. What differs by country is which industries that investment flows into and what attracts it. Countries with industrial agglomeration and supporting industries draw high-value-added manufacturing and technology investment; those that lack them draw assembly-, retail- and service-type investment. Below, the major countries are taken up in order of deal count, with the remaining countries and regions grouped at the end. China, where divestment-oriented transactions exceed investment-oriented ones, is placed in the second subsection as a market of a different character from the others.
Singapore: The Confluence of Capital and the Gateway for Intra-Regional Investment
At 38 deals (20.9%) cumulatively in the first half, Singapore held the top spot by a wide margin over other countries. Singapore itself is neither a final demand market nor a manufacturing base; its prominence derives from a concentration of “functions.” First is its role as the confluence of financial and asset-management functions. In Q2 as well, there was a succession of LP investments in multiple funds—Cross Capital, TNB Aura, Keppel Education Asset Fund and a crypto-asset quant fund. Second is its role as an investment gateway (regional headquarters base) to all of Southeast Asia. Against the backdrop of advantages in regulatory transparency, legal systems, talent and taxation, Japanese companies place investment subsidiaries and holding companies in Singapore and deploy capital into the region from there. That investment in industrial services (Itochu and Sankyu’s acquisition of SWTS Asia; Daisan’s acquisition of Penguin Engineering) and DX areas spread simultaneously is a manifestation of this dual nature. The high deal count in Singapore is itself a proxy indicator of the structural trend toward “hubbing” intra-regional investment.
China: The Only APAC Market Where Divestment-Oriented Transactions Are Dominant
At 24 deals (13.2%) cumulatively in the first half, China ranked second. Its substance, however, is decisively different from other markets. In China, 54% of domestic deals (13 of 24) were divestment-oriented, and China is the only major APAC market where divestment-oriented transactions exceed investment-oriented ones. Of the 33 divestment-oriented transactions across all of APAC in the first half, roughly four in ten—13 deals—were concentrated in China. This stands in contrast to growth markets, which are almost entirely occupied by investment-oriented transactions.
The substance of the divestment-oriented transactions has a clear sectoral bias. The largest share of the 13 deals—5 deals—was in Electronics (Maxell Wuxi, Ricoh Shenzhen, ROHM Dalian, Tamura Foshan, ASTI Zhejiang), all transferring the entire stake in a Chinese subsidiary to a local company. Alongside these were Chemicals & Materials (Yodogawa Steel Works Hefei, Taiheiyo Cement Jiangnan-Onoda), Machinery (Meiji Machine Dezhou, Oriental Chain Mfg.) and Transportation Equipment (Futaba Industrial Tianjin, Akebono Brake Guangzhou partial transfer). In other words, the streamlining is concentrated in export-to-U.S., commodity-component and low-margin manufacturing sites, and is a planned capital recovery against the backdrop of rising labor costs, the rise of local competitors and geopolitical risk.
On the other hand, 7 investment-oriented transactions (acquisitions and minority investments) also ran in parallel. Ureru Net Advertising Group acquired Adways’ Chinese subsidiary Adways Advertising (Shanghai) and its Hong Kong subsidiary, internalizing the digital-advertising field, and Sanming International took a majority stake in a cross-border cosmetics-sales business on Hainan Island. The 7 investment-oriented deals are distributed toward domestic-demand and digital areas, such as professional services, consumer and electronics. The remaining 4 are intermediate types: Asahi Kasei transferred its stretch-fiber “Roica” business to a joint venture with Hangzhou Qingyun (joint venture), and a Chinese subsidiary of Ferrotec conducted a third-party allotment capital increase (fundraising), along with one canceled stake transfer and one inbound investment by overseas capital. Retreating from commodity and export manufacturing while selectively deploying into domestic-demand-linked digital, consumer and local-partner types—China conduct is converging on a directional swapping of interests.
South Korea: Capital Tie-Ups in Content and Digital as the Main Axis
At 19 deals (10.4%) cumulatively in the first half, South Korea ranked third. Rather than a growth market, South Korea is an advanced market that holds a complementary relationship with Japan in content, entertainment and digital services, and the character of the capital tie-ups reflects that. In Q2, observed deals included DG Daiwa Ventures’ investment in web-novel studio Peex, comseed’s capital alliance with short-drama firm BAMBOO NETWORK, and NAVER D2SF’s investment in AI cross-border e-commerce platform SAZO. In areas such as IP, content and cross-border e-commerce, capital-alliance-type collaboration that multiplies the two countries’ production capacity, technology and markets is spreading across the consumer, information-and-communications and entertainment fields.
India: Emerging as a Multifaceted Investment Destination
At 17 deals (9.3%) cumulatively in the first half, India ranked fourth. Deals are dispersed across a wide range of industries—financials, consumer and logistics—showing that India is emerging not as a single theme but as a multifaceted investment destination. Of these, 15 were investment-oriented (9 minority investments, 4 acquisitions, 2 capital alliances); apart from the two sales of a Sharp Indian subsidiary and Nippon Microbiopharma’s Indian business, the great majority tilt toward investment.
Noteworthy is the breadth of entry methods. On one side are deals reaching for control, such as Kyusyu Rendashi System’s acquisition of Coldrush Logistics (majority stake) and Hakuto’s acquisition of Rabyte Edge (76% stake). On the other are deals connecting “light and fast” via CVC- or fund-mediated minority stakes, such as ENRISSION INDIA CAPITAL’s investment in Founderlink Technologies and Chubu Electric Power’s roughly ¥23 billion investment in Continuum Green Energy. By count, the latter minority type is more numerous; while the Japan-India rapprochement on economic security and investment underpins deal creation, in an environment where market, regulatory and execution risks still remain, companies tend to adopt a design that connects through an entry point balancing speed with limited risk, then deepens involvement as progress warrants.
Taiwan: Streamlining Is the Swapping of Non-Core Businesses; Investment Is Advanced Technology and Individual Assets
At 16 deals (8.8%) cumulatively in the first half, Taiwan ranked fifth. Against the backdrop of its concentration of semiconductors and advanced technology, investment spreads broadly—anchored in information and communications, consumer and electronics—from large-scale semiconductor-related deals to individual financial and energy assets. In Q2, observed deals included Funds’ acquisition of a financial-services firm and Vpon’s acquisition of an AI ad-technology firm. Sales also occur sporadically, but none represent a withdrawal from advanced manufacturing—they are limited to the swapping of non-core, real assets, such as Mitsubishi Chemical’s transfer of an MMA-monomer business and Marubeni’s transfer of an LNG-fired power business. Taiwan is a mature investment destination where strategic investment and asset swapping coexist.
Malaysia: High-Value-Added Investment Drawn by the Penang Semiconductor Back-End Agglomeration
At 15 deals (8.2%) cumulatively in the first half, Malaysia ranked sixth. The basis on which Malaysia attracts investment is not merely as an alternative production site but the already established industrial agglomeration of semiconductor back-end processes (assembly, test and packaging = ATP). Penang is one of the world’s leading semiconductor ATP hubs, with a thick concentration of multinationals and local SMEs forming a supporting base for precision manufacturing. It is precisely because of this agglomeration that manufacturing investment premised on a supporting base of component procurement and technical talent—such as TDK’s acquisition of lithium-ion battery maker Linergy Power—becomes viable. The government is also pursuing higher value-added (expansion into front-end processes and design) as policy, making Malaysia, for Japanese companies, an investment destination on which to “ride the depth of agglomeration.” In addition, consumer realignment advanced, as in Ajinomoto’s full-ownership proposal, with both manufacturing agglomeration and growing domestic demand supporting investment.
Thailand: The Pulling Power of Manufacturing Investment Generated by the Supporting Base of the Automotive Cluster
At 12 deals (6.6%) cumulatively in the first half, Thailand ranked seventh. The core of Thailand’s pulling power lies in the automotive-industry cluster accumulated over half a century. As the “Detroit of the East,” where Japanese makers account for the bulk of production and numerous local suppliers support a high localization rate, and with a thick concentration in electronics (HDDs, semiconductor packaging), this depth of the supporting base continuously draws in investment in components, materials and industrial services. Half a century of accumulated industrial agglomeration makes Thailand a stable receptacle for manufacturing investment.
Sales also occur sporadically in Thailand—Bridgestone’s transfer of a steel-cord business (to a Belgian company, integrated with its China business), Toyo Seikan’s partial transfer of a can-manufacturing subsidiary, GMO’s exit from the digital-asset business, and metal-mesh and testing services—but these are swaps of individual businesses varied in both sector and background, differing in character from the planned withdrawal from commodity manufacturing sites seen in China. They do not signify a retreat from industrial agglomeration.
Vietnam: A Growth Market Where the Challenges of Supporting Industries Constrain the Quality of Investment
At 11 deals (6.0%) cumulatively in the first half, Vietnam ranked ninth. Vietnam has risen as a receptacle for assembly and labor-intensive processes on the back of labor costs and a young population. Looking at first-half deals, the center is digital and services—such as KDDI Agile Development Center’s software-developer subsidiary and Elevator Communications’ IT investment—and domestic-demand and infrastructure—such as Nishi-Nippon Railroad’s housing-development investment and Kato Sangyo’s food business. The high-value-added manufacturing investment premised on established industrial agglomeration seen in Malaysia and Thailand does not stand out among this quarter’s observed deals. The gap with the leading countries in the depth of supporting industries such as semiconductor back-end processing and automotive appears to be reflected in the quality of investment Vietnam takes on for the time being.
Indonesia: Pure Investment Spreading into Manufacturing, Logistics and Infrastructure
At 8 deals (4.4%) cumulatively in the first half. Against the backdrop of a population of 260 million and urbanization and middle-class expansion, investment spreads into manufacturing, logistics and infrastructure. In Q2, Nichirei acquired cold-chain logistics businesses (PT Mega Indo Logistik and others), Obayashi made an expressway-concession operator (PT JTD JAYA PRATAMA) an affiliate, and Toyota Boshoku, Topy Industries and Fukoku realigned or acquired automotive-related local businesses. Logistics and infrastructure are tied to the long-term structural demand accompanying urbanization, and the automotive-related deals mirror Indonesia’s positioning as a second production base after Thailand. This quarter saw no observed sales, placing Indonesia in an investment-only phase.
Philippines: Steady Investment in Financials, Consumer and Services
At 7 deals (3.8%) cumulatively in the first half. Steady investment tied to English-language talent, BPO and growing domestic demand continues—financials (Premium Group’s acquisition of Etomo Financing; Aska Pharmaceutical HD’s additional acquisition of FTS Ambrose), consumer and retail (a JINS HD subsidiary’s acquisition of an eyewear business) and professional services (Suke-dachi’s bringing a CAD-contract business into its group). The count is not high, but its character as a growth market is clear.
Hong Kong: A Relay Function for Financials and Digital, Where Streamlining and Investment Intersect
At 11 deals (6.0%) cumulatively in the first half. Rather than an independent final market, Hong Kong has a strong character as a relay base for financials and digital into mainland China and Asia. Two divestment-oriented deals (Septeni HD’s transfer of a digital subsidiary; a Kosaido HD–related stake sale) intersected with investment-oriented ones; in Q2, Itochu invested in a Hong Kong subsidiary of Nissin Foods HD, and Return Helper raised funds for a cross-border e-commerce returns solution. Linked to the de-risking of the mainland, Hong Kong carries the relay function for financials, e-commerce and content.
Other Countries and Regions
Australia (3 deals) saw individual consumer and logistics deals such as XEBIO HD’s golf-retail acquisition and Logisteed HD’s investment in a Toll subsidiary; Pakistan (1 deal) remained a one-off observation. Both had low deal counts through the half-year, not reaching a denominator sufficient to argue structural trends.
Lining up the countries in this way brings into sharp relief a functional differentiation in which the quality of deals taken on diverges according to agglomeration and stage of growth. Divestment-oriented transactions arise structurally only in China; the sales in Thailand, Taiwan and Malaysia are limited to individual swaps of non-core businesses. In growth markets such as India, Indonesia, the Philippines and Vietnam, even with sporadic sales, the great majority of deals are investment-oriented. “China-Plus-One” is advancing not as a search for a homogeneous alternative site but in a form where deals qualitatively matched to each country’s functions accumulate.
3. Cross-Cutting Themes
China’s Streamlining and Investment Are a Swapping of Interests
In China, while 13 divestment-oriented deals skew toward commodity manufacturing and component sites, 7 investment-oriented deals head toward domestic-demand and digital areas such as professional services, consumer and electronics. This parallel progress shows that Japanese companies’ China conduct is not a uniform withdrawal. While letting go of export-to-U.S. and low-margin manufacturing sites, they selectively deploy into domestic-demand-linked digital, consumer and local-partner-type businesses. China is effectively the only place in APAC where streamlining and investment clearly run in parallel within the same market; the sales in Thailand, Taiwan and Malaysia are limited to individual swaps of non-core businesses. China’s phase is one in which ordinary portfolio management—reshuffling assets according to capital efficiency, growth potential and geopolitical risk—appears in an extreme form in a single country under the pressure of U.S. friction and rising costs. The more the selection of “what to keep” and “what to exit” advances, the more the contours of China operations narrow from commodity manufacturing toward domestic demand and digital.
The Shift in the Center of Gravity of Deals Toward Consumer and Digital
The top composition—Consumer & Retail (24 deals) in first place and Information & Communications (22 deals) in second—shows that the center of gravity of the deal count has moved from the supply side (supply chains, economic security) toward the demand side (domestic demand in growth markets and digitalization). Against the backdrop of the maturity of Japan’s domestic market, deals are gathering around two growth drivers: the consumption of the local middle class, and the industrial penetration of AI and DX. The economic-security theme of semiconductors and critical minerals continues as an undercurrent on the supply side, but the momentum in the count is led by the demand side.
The Persistence of Investment-Oriented (Minority, Fund-Mediated) Methods at a High Level
On a first-half cumulative basis, with 66 acquisitions and 49 minority investments, investment-oriented transactions accounted for roughly 70% of the total. Not limited to the acquisition of control, the method of connecting early with minority stakes via CVC and funds is expanding into a broad range of markets. This method holds particular rationality in an environment where, as in India, rapprochement between nations creates opportunity while market and regulatory risks remain, functioning as an “entry point” that balances speed with limited risk. Singapore’s concentration of fund functions provides the infrastructure for this indirect approach.
4. Implications for Full-Year 2026
1) Redesigning Regional Strategy on the Premise of “Capital Reallocation”
The configuration of structural capital recovery from China and investment-oriented-led activity in growth markets is likely to continue for the time being. Regional strategy should be built not as a search for a single production-transfer destination but as portfolio design—determining into which growth stage of which market, and by which method, capital is allocated.
2) Selecting Destinations on the Criterion of “the Depth of Agglomeration”
In evaluating destinations, the maturity of industrial agglomeration and supporting industries—not just labor costs and market size—should be placed at the center. The depth of agglomeration (Malaysia’s semiconductor back-end, Thailand’s automotive supporting base) is indispensable for high-value-added manufacturing investment, and in markets that lack agglomeration it is more rational to weight the design toward assembly-, service- and domestic-demand-type investment. The progress of Vietnam’s supporting-industry development measures (2026–2035) will be a matter warranting attention, as it will influence the quality of investment the country can take on.
3) Designing a “Fast and Light Entry” That Captures the Japan-India Rapprochement
The Japan-India rapprochement on economic security and investment is likely to accumulate deals over the full year around semiconductors, critical minerals and clean energy. Deals aiming at the acquisition of control are also emerging, but in a phase where market, regulatory and execution risks remain, a design that connects fast and light via CVC- and fund-mediated minority stakes, then deepens involvement as progress warrants, remains effective.
4) Selective Redesign of the China Position
For China, a redesign is required that clearly separates the streamlining of commodity and export manufacturing from selective investment in domestic-demand-linked digital, consumer and local-partner-type businesses. The discipline of rigorously distinguishing “what to keep” from “what to exit” from the standpoint of capital efficiency and geopolitical risk will remain a core issue over the full year.
5) The Continuation of the Economic-Security Theme and the Demand Side as the Driver
The economic-security theme of semiconductors, critical minerals and advanced materials is likely to accumulate deals over the full year as a supply-side undercurrent. At the same time, the momentum in the deal count is led by the demand side of consumer and digital. Companies that can design the supply side (strategic, defensive investment) and the demand side (growth, offensive investment) as an integrated whole are better positioned to raise their full-year investment efficiency.
Conclusion
In APAC in the first half of 2026, while the overall volume of transactions held to last year’s pace (cumulative 182 deals), comparing the composition with the prior full year reveals a change in the substance of deals. De-risking of China advanced not as a simple withdrawal but as a selective parallel of commodity streamlining and domestic-demand and strategic investment, and its receptacle differentiated qualitatively according to “the depth of agglomeration.” The center of gravity of the deal count moved from the supply side to the demand side (consumer and digital), and the change in the international environment—the Japan-India rapprochement—is underpinning the method choice of a “fast and light entry” via minority stakes and funds.
The first-half data show that, even under China de-risking, investment toward APAC has not decelerated, and that the selection of investment destinations is advancing qualitatively according to “the depth of agglomeration” and stage of growth. The skill of portfolio design—determining into which growth stage of which market, and by which method, capital is allocated—will determine the full-year investment outcome.
See the next page for the detailed deal list.