In a few years people may look back at 2025 and consider it the year that Asia-Pacific came of age as an event-driven hedge fund investment region.

This view is clearly supported by the 20.32% return achieved in 2025 by the With Intelligence Asia Event Driven Hedge Fund Index. And also by public M&A and shareholder activism data that shows deal activity hit record highs last year. But it is the nature of many of the year’s largest deals that provided the most important sign that public M&A in the region has matured.

Over the past 12 months APAC’s corporate leaders displayed an unusual degree of willingness to proactively create corporate value by unwinding legacy group structures and reshape portfolios via spinoffs, divestitures, buyouts and transformational acquisitions.

The total volume of billion-dollar carve-outs from APAC public companies tripled year-on-year to USD 264.5bn (57) from USD 83.7bn (37) in 2024. Last year’s activity level was 28% higher than five-year average deal count and 185% above the five-year average deal volume.

Corporate buyout activity also soared. Related-party proposals made up 17.6% (26) of the APAC public M&A universe in 2025, up from 20 proposals in 2024. Five of APAC’s six public M&A deals worth more than USD 10bn in implied equity value (IEV) last year involved a subsidiary buyout.

Each of these five buyouts formed a key plank of the respective conglomerate’s wider strategic reorganisation and together they marked an unprecedented cluster of large-scale corporate value driven deals.

The five buyouts were Toyota Fudosan’s acquisition of Toyota Industries (USD 39.5bn IEV), NTT’s buyout of NTT Data (USD 38.7bn IEV), HSBC’s privatization of Hang Seng Bank (USD 37.3bn IEV), Sumitomo’s take-private of SCSK Corp (USD 11.7bn IEV) and ENN Natural Gas’ offer for ENN Energy (USD 11.6bn IEV).

The strategic, rather than opportunistic, nature of these deals was evidenced by the 33.9% median premium to undisturbed price of these deals – a significant jump in the 19.8% of the previous year. The decent premiums offered suggests the parents were motivated by long term strategic thinking and a deep desire to complete the transactions than by opportunism.

The five buyouts accounted for nearly half of the USD 327.4bn total IEV of APAC public M&A in 2025. But this does not mean that APAC public M&A last year followed the wider global trend of more big deals but fewer deals overall.

As shown in the chart below, the total implied value of public M&A (USD 200m+ IEV) last year reached its highest level since 2007 with the number of target companies amounting to 140 – 35% more than the previous year and very close to previous peak years.

Driving this activity was Japan where public M&A by implied equity value rose 52.5% on the previous year to USD 165.4bn. This continued a trend that began in 2023 on the back of the Tokyo Stock Exchange’s renewed corporate governance reforms.

In total, Japan saw 77 indicative and definitive proposals for 74 listed targets, amounting to USD 165.4bn in IEV. The number of Japanese companies targeted represents over half of the region’s public M&A deals in 2025 – up until 2022 the country had consistently accounted for approximately one-quarter of all APAC public M&A deals.

The steady rise in Japan public M&A volumes and value since 2023 reflects the degree to which strengthened corporate governance regulation and shareholder activists have influenced board-level thinking around M&A as value creation option.

Australia and Hong Kong, two other historically dominant public M&A jurisdictions in APAC, took second and third place in the region in IEV. Australia recorded 34 indicative and definitive takeover proposals worth a combined USD 53.3bn for 31 public targets. Hong Kong followed in terms of IEV, largely driven by HSCB’s privatization of Hang Seng Bank (USD 37.3bn), although it just accounted for six public M&A bids above USD 200m.

Sponsor-led public M&A

In APAC overall, sponsor led M&A accounted for a third of APAC’s total public M&A, its highest such level since 2018 when 37% (USD 93.9bn IEV) of deals had financial rather than trade buyers.

A total of 47 sponsor-led deals were recorded in 2025 worth USD 66.8bn in IEV. This reflects a 42% increase in the number of sponsor‑led deals over the previous year and a 54% rise in IEV (from USD 43.4bn in 2024).

Around 40% of this activity by IEV occurred in Japan and stemmed from the rise in strategic divestitures, which created opportunities for private equity investors. There were at least 16 sponsor led public M&A involving listed targets being divested by a Japanese corporate in 2025 compared to just four in 2024 and two in 2023.

Examples include Fujitsu’s exit from Fujitsu General, Sumitomo Electric Industries’ sale of Sumitomo Densetsu, JT Group’s disposal of Torii Pharmaceutical, and Mitsubishi Heavy Industries’ divestment of Mitsubishi Logisnext.

Further evidence of the growing maturity of Japan’s M&A market came with the emergence last year of a swathe of bid proposals from shareholder activists. These funds were catalysts for numerous corporate deals including Topcon, Fujitec, Hogy Medical, Star Micronics, Soft99, Digital Holdings, and With Us Corp.

Outside of Japan, two notable private equity take-privates took place in Hong Kong: TPG’s buyout of Kangji Medical and Centurium’s offer for ANE (Cayman). The deals marked the two firm’s first ever Hong Kong take privates and were launched after they managed to convince founder chairman that going private was the only way to address constrained public market valuations and create long term value.

APAC inbound M&A 

Cross-border public M&A deal announcements across the APAC region amount to about 40% last year, which is consistent with previous years. But most, it should be acknowledged, focused on Australia and Japan.

Australian public M&A has long been dominated by inbound bids and last year was no different with 17 deals out of 29 in total involving foreign bidders. Inbound public M&A is taking an increasing share of Japan’s public M&A scene with 23 out of a total of 75 public M&A deals involving foreign buyers.

Factors driving this inbound interest include Japan’s corporate governance reforms along with sustained high gold prices and the global energy transition which fueled inbound bid interest for both Japan Inc and Australian natural resources companies.

Deal collapses

Despite APAC’s rising conduciveness to public M&A, 2025 showed it remains one thing to launch a cross-border bid into Asia and another to complete it. The collapse of Abu Dhabi National Oil Company’s USD 18.7bn bid for Australian oil company Santos and Alimentation Couche‑Tard’s failed USD 46.9bn bid for Seven 7 & i were evidence of that.

Both deals met with entrenched boards and shareholders insufficiently powerful to influence the target’s engagement with the bidder. Coming on top of the usual cross-border M&A complications, such as foreign investment screening, this proved too much for the respective bidders. Seven & i’s case perhaps shows there are limits to how far Japan’s governance reforms can push boards into focusing on shareholder value.