by JIANG Yiman

China's corporate mergers and acquisitions market rebounded in 2025, with both deal value and volume rising sharply after years of slowdown, according to a report released on Feb. 6 by PricewaterhouseCoopers.

Total disclosed deal value exceeded US$400 billion last year, up 47% from 2024 and marking the first year-on-year increase in five years, the report said. The number of transactions rose nearly 20% to more than 12,000, signaling a broad recovery in market activity.

Onshore strategic buyers were the main drivers of the rebound. They completed 3,639 deals worth US$239 billion, an 83% increase in value from a year earlier. Of the 34 mega-deals in this segment, more than half were led by state-owned capital and focused on sectors such as semiconductors, artificial intelligence and new energy, pointing to deeper consolidation in policy-prioritized industries.

Financial investors also became more active. Private equity funds completed 1,189 transactions valued at US$139.4 billion, up 14% in volume and 16% in value year on year. Fourteen mega-deals were completed, eight of which involved state-backed funds, with investments concentrated in technology, industrials and healthcare.

Venture capital activity reached a record high, driven by strong interest in artificial intelligence, AI-related applications and robotics. The report recorded 7,382 VC deals during the year, including more than 3,000 transactions in high-tech sectors, accounting for 42% of the total.

Exit activity also picked up. M&A was the most common exit route for private equity funds, while IPO exits in Hong Kong gained importance as an alternative channel. Listings on the Hong Kong Stock Exchange totaled 70 deals in 2025, the highest on record, PwC said.

QIAO Laizhi, PwC's mainland China M&A services managing partner, said the recovery in the market was underpinned by improved valuations and the reopening of IPO exit channels, which helped support deal pricing. She added that industry consolidation, technological advances and growing exit pressure on financial investors had further lifted transaction activity.

PwC said uncertainties linked to global trade and geopolitics, as well as a limited supply of high-quality assets, could continue to weigh on the market. Even so, it expects deal activity to remain supported in 2026, with technology, industrials, new energy, biopharmaceuticals and consumer goods likely to remain key areas of focus.