Southeast Asia

What you need to know

• Record dealmaking despite headwinds: Deal value surged 88% to US$54 billion in H1 2026, even as political transitions, elections and geopolitical tensions extended timelines and increased deal uncertainty.
• Change and challenge remain the constant: Indonesia is in transition, elections are ahead in Malaysia, Cambodia and the Philippines, and US-China tensions remain unresolved.
• Capital follows conviction: Technology transactions led by value (US$16.5 billion) as digitalisation accelerates; while industrial-related transactions led by deal count (92 deals) as supply chains diversify amid deglobalisation.
• Private capital continues to deploy, but exits lag: Sponsor volume hit US$23.2 billion, yet there were only 21 exits in H1 2026 as fund life pressures mount.
• Regional capital deepens: 57% of deals involved Southeast Asia (SEA) acquirers - intra-regional flows prove resilient to external shocks.
  

The M&A state of play

Southeast Asia’s M&A market reached an interim period high in H1 2026. Aggregate deal value climbed 88% year-on-year to US$54 billion, up from US$28.8 billion in H1 2025, even as deal volume declined 9% to 395 transactions. On a half-on-half basis, deal value rose 10% from US$49.1 billion in H2 2025, while volume fell 16% from 474 deals. Capital is concentrating in fewer, larger transactions as investors prioritise proven businesses with strong cash flows over more speculative growth plays.

The largest announced deal was KKR and Singtel’s acquisition of the remaining 82% interest in ST Telemedia Global Data Centres, valued at US$9.0 billion. This was followed by DayOne Data Centers’ US$4.5 billion Series C financing (one of the largest venture rounds in the region’s history) and Sunway Berhad’s proposed US$3.6 billion acquisition of IJM Corporation, which ultimately lapsed in April 2026 after failing to secure the required level of acceptances. Other notable transactions included CapitaLand Integrated Commercial Trust’s US$3 billion acquisition of Paragon mall, ENEOS Holdings’ US$2.2 billion purchase of Chevron Singapore, and KKR’s US$1.3 billion acquisition of XCL Education Holdings from TPG Capital.

The top 10 publicly disclosed Southeast Asian related M&A deals in H1 2026 were as follows:

Source: Mergermarket

Sector trends

Technology driven transactions led all sectors by aggregate deal value, with 67 deals totalling US$16.5 billion, representing 30% of total deal value. Digital infrastructure supporting AI workloads emerged as a defining theme: data centre transactions alone accounted for two of the three largest deals in the half. Industrials recorded the highest deal count (92 transactions) with an aggregate value of US$8.1 billion, followed by real estate (US$6.9 billion across 24 deals), energy and natural resources (US$5.8 billion across 40 deals), and communications, media and entertainment (US$4.9 billion across 4 deals). Consumer and retail activity was also prominent by volume, with 49 deals valued at US$4.5 billion. Healthcare recorded 28 deals with a disclosed value of US$0.71 billion, led by PT Siloam International Hospitals’ US$300 million acquisition of a portfolio of 8 hospital assets and Everest Medicines’ US$250 million acquisition of Hasten Biopharmaceuticals. Education recorded 7 deals with a disclosed value of US$1.37 billion, dominated by KKR’s US$1.3 billion acquisition of XCL Education and Sun Venture’s US$389 million acquisition of PSB Academy from ICG.

Intra-regional activity

Intra-regional M&A remains a distinguishing feature of Southeast Asia’s dealmaking landscape. Of the 395 deals in H1 2026, 57% involved a Southeast Asia-based acquirer. Thai, Singaporean and Malaysian corporates have been particularly active across neighbouring markets, with Indonesian and Vietnamese companies emerging as attractive targets. At the country level, activity diverged sharply: Singapore anchored regional dealmaking with US$31.6 billion across 141 deals, reinforcing its status as the region’s deal hub and preferred holding jurisdiction—with widespread use of Singapore governing law and SIAC arbitration. Malaysia recorded US$8.7 billion (74 deals), Thailand US$6.4 billion (43 deals), Indonesia US$3.8 billion (55 deals), the Philippines US$1.7 billion (32 deals), Vietnam US$1.3 billion (46 deals) and Cambodia US$0.5 billion (4 deals).

The rise of private equity

While strategic acquirers have consistently accounted for the majority of Southeast Asian deal volume, private equity (PE) activity has trended sharply upwards. Sponsor deal volume in H1 2026 reached approximately US$23.2 billion across 58 deals—up dramatically from US$2.9 billion in H1 2023. This surge reflects both increased capital deployment and sponsor-to-sponsor activity, including KKR’s acquisition of XCL Education from TPG.

The challenges

Political and regulatory complexity: Political and regulatory complexity remains a defining feature of the Southeast Asian landscape and is a key reason why deal timelines continue to extend. Indonesia is in transition following significant changes in government policy. At least three other jurisdictions have elections scheduled over the coming years: Malaysia (state polls late 2026 to early 2027; general election by February 2028), Cambodia (commune elections June 2027; national election 2028), and the Philippines (May 2028). Geopolitical uncertainty outside Southeast Asia, including Middle East tensions and US-China dynamics, has further extended decision-making cycles.

Exit pressures persist: Sellers continue to hold firm on pricing while buyers remain cautious in the face of global and regional uncertainties. Trade sales remain the primary route to liquidity, while IPO activity varies sharply by jurisdiction: Malaysia led the region with 34 IPOs in H1 2026 (building on 59 in 2025), while Singapore, Indonesia and Thailand recorded single digit IPOs – reflecting post-election caution and domestic headwinds. For PE, the exit challenge is compounded by fund life pressures. Of the 395 deals in H1 2026, only 21 were PE exits. Many Southeast Asia-focused funds raised between 2018 and 2021 find themselves managing aging portfolios with significant time pressure to exit but limited exit options, leading to more sponsor to sponsor transactions. This dynamic is driving increased interest in GP-led secondaries, continuation vehicles and structured liquidity solutions. For LPs, extended holding periods raise questions about return profiles.

Outlook: Structural drivers intact

Despite the challenges, the outlook remains constructive. PE activity will continue to pick up as funds seek both exits and deployment opportunities. Strategic acquirers, undeterred by political and regulatory complexity, will maintain their long-term view on the region’s fundamentals. Structural growth drivers remain intact: digitalisation and deglobalisation will continue to underpin deal making activities. We expect continued interest in digital infrastructure and industrials. Countries with strong domestic consumption will also see an uptake in dealmaking activity, provided their domestic economies remain on track.