China-ASEAN M&A: A two-decade overview of strategic investments

by Exactly Metaforma Ma'rifat

China's relationship with Association of Southeast Asian Nations (ASEAN) countries has historical roots in ancient trade routes and has significantly evolved, particularly through mergers and acquisitions (M&A). The region has become a focal point for Chinese outbound M&A activities, supported by trade agreements like the ASEAN-China Free Trade Agreement and the Regional Comprehensive Economic Partnership (RCEP).

From 2000 to 2024, there were 233 M&A transactions between China and ASEAN, totalling over USD 120 billion. Activity peaked between 2015 and 2018, especially in 2016 with 26 transactions. Singapore led with 123 transactions, reflecting its status as a financial hub, followed by Malaysia (27), Indonesia (20), Thailand (19), and Vietnam (18). The Philippines recorded 8 deals, while Cambodia and Laos had one each. Myanmar, Brunei, and Timor Leste reported no deals.

Sector-wise, the industrial sector led with 53 transactions, encompassing industries such as construction, machinery, marine transportation, and logistics. The technology, media, and telecommunication (TMT) sectors followed with 43 transactions. Other sectors included consumer (33), financial (28), real estate (21), and materials (18). These trends align with China's strategic objectives of acquiring industrial and technological assets to support its “industrial upgrade” goals.

Chinese investment strategies are shaped by the 13th Five-Year Plan and the Belt and Road Initiative (BRI), which prioritise infrastructure development across Asia. M&A activities have focused on logistics and industrial infrastructure to enhance regional connectivity. Key investments in railways, ports, and digital infrastructure aim to create seamless supply chains between China and ASEAN countries like Indonesia, Malaysia, and Thailand.

Singapore's appeal for Chinese investment is due to its strong financial infrastructure and pro-business environment. It recorded significant deals across various sectors: 31 in industrial, 23 in TMT, 15 in financial, and 14 in consumer. While Malaysia, Indonesia, and Vietnam may have less developed business environments, they offer valuable resources and young populations that attract Chinese firms.

Notable M&A transactions include Hillhouse Investment Management's acquisition of Global Logistic Properties Limited in Singapore for USD 27.3 billion in 2017. More recently, S.F. Holding Co., Ltd. acquired Kerry Express (Thailand) Public Company Limited for USD 10.1 billion in 2023. These high-profile deals reflect a shift from traditional resource investments to logistics, technology, and advanced manufacturing as part of China's broader BRI strategy.