Taiwanese companies should accelerate their footprint in global markets through mergers and acquisitions (M&As), taking advantage of a shifting geopolitical landscape that has depressed valuations and created a window for strategic expansion, an annual M&A report released yesterday said.
The report, issued jointly by PwC Taiwan (資誠) and the Taiwan Mergers and Acquisition and Private Equity Council (台灣併購與私募股權協會), said that buyers have the upper hand, as potential players turn largely conservative amid economic uncertainty linked to US tariffs.
Taiwanese firms must not view uncertainty as a deterrent, but an opportunity to secure future growth, Kelly Chou (周容羽), a managing director at PwC Taiwan told an M&A forum in Taipei.
Photo courtesy of PwC Taiwan
Cross-border dealmaking has become a core strategy for Taiwan’s corporations in the pursuit of critical technology, new markets and supply chain resilience, the paper said, citing a survey of more than 202 corporates, private equity funds and advisory firms.
That conviction is already reflected in capital flows. Taiwan’s M&A transactions last year surged 81 percent to US$16.22 billion, the second highest in history, although the number of deals declined slightly to 121, it said.
The number of outbound deals by Taiwanese firms reached a record 46 transactions, with a significant rise in deals of US$50 million or less, highlighting a preference for smaller, strategic acquisitions that enable controlled expansion with lower integration risks, the paper found.
The geographical footprint of Taiwanese investments is also undergoing a significant transformation, it said.
Once heavily concentrated in China and surrounding Asian markets, Taiwanese businesses are now diversifying aggressively, it said.
Last year, 55.5 percent of listed Taiwanese companies established operations across key regions such as the US, Canada, Europe, Japan, Southeast Asia, South Asia, Australia and New Zealand.
Only less than 20 percent remain focused on the Chinese market — suggesting how the US-China trade disputes and the COVID-19 pandemic have reshaped corporate strategy, it said.
In addition, Europe has emerged as an attractive destination. Pressured by the Russia-Ukraine conflict, rising interest rates and tightening environmental regulations, many European conglomerates are divesting non-core assets in an effort to streamline operations, it said.
Taiwanese firms, which are well-capitalized and increasingly ambitious, are stepping in to fill the void — bringing not only capital, but also strategic alignment, particularly in sectors such as semiconductors, medical technology and consumer electronics, it said.
Despite the momentum, challenges remain. Post-merger integration, especially in cross-border settings, continues to test management capabilities, it said.
The shortage of international managerial talent and the complexities of aligning corporate cultures also have proven difficult for many Taiwanese firms to overcome, it said.
Furthermore, inbound M&A has softened. Foreign interest in acquiring Taiwanese companies declined in both the number and value of deals last year, suggesting that international investors remain wary of the region’s geopolitical sensitivities, it said.
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