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M&A

China’s M&A Market Rebounds Amid Stimulus Measures and Trump Tariff Pressure

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China’s mergers and acquisitions (M&A) market is witnessing a resurgence after years of decline, driven by government stimulus measures and mounting pressure from U.S. tariffs imposed by former President Donald Trump. After five consecutive years of declining deal volume, China’s M&A activity surged in the final quarter of 2024, with deal value rising by 78.5% to $129 billion from the previous quarter’s $72 billion, according to Dealogic. Industry experts attribute this uptick to stimulus policies introduced in September 2024, aimed at consolidating domestic industries and strengthening China’s economic competitiveness. Despite this positive momentum, China’s total M&A deal value in 2024 remained nearly 45% lower than in 2020, when it reached $553 billion. Economic slowdown and cautious corporate strategies have contributed to a conservative investment approach in recent years, said Theodore Shou, chief investment officer at Skybound Capital. However, experts predict 2025 will bring a major shift, with increased M&A activity as Chinese firms adapt to fresh tariff challenges. Trump’s new 10% tariffs on Chinese goods, effective from February 4, have compounded existing levies of up to 25%. This has intensified the need for companies to diversify supply chains and seek strategic mergers to maintain global market relevance. Deloitte’s APAC M&A Services Leader, Stanley Lah, noted that consolidation is the fastest way for businesses to restructure amid trade pressures. Smaller enterprises, in particular, are feeling the strain, as indicated by a 4.8% drop in their revenue in Q3 2024, per Peking University’s Centre for Enterprise Research. With increasing deal activity and evolving trade dynamics, 2025 is poised to be a crucial year for China’s corporate landscape. Source: CNBC

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CCI’s M&A Overhaul: Stricter Scrutiny, Faster Approvals Under New Rules

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News on HR

India’s merger and acquisition (M&A) landscape has undergone a significant transformation with the recent amendments stemming from the Competition (Amendment) Act, 2023. Notified on September 9, 2024, these changes introduce stricter regulatory scrutiny while aiming to enhance ease of doing business. The new framework sets clear deal value thresholds, accelerates decision-making processes, and broadens the definition of control, aligning India’s regime with global standards. Key Highlights of the Revised M&A Framework: Deal Value Thresholds: Under the revised rules, any M&A valued above Rs 2,000 crore ($240 million) must be notified to the Competition Commission of India (CCI), provided the target has “substantial business operations” in India. This includes if the target’s Indian turnover or gross merchandise value (GMV) exceeds Rs 500 crore ($60 million) or constitutes at least 10% of global figures. Expedited Timelines: The CCI’s timeline for reviewing mergers has been shortened. The initial review period has been reduced from 30 working days to 30 calendar days, and the overall review period has been shortened from 210 to 150 days. This move promises faster clearances, benefiting businesses looking for speedier consolidation. Expanded Definition of ‘Control’: The new framework expands the definition of control to include the “ability to exercise material influence” over the management or strategic decisions of another entity. This change may bring more M&A transactions under CCI’s purview, ensuring that influential stakeholders are properly scrutinized. Exemptions for Minority Acquisitions: Acquisitions involving less than 25% of shares or voting rights that do not result in a change of control are now exempt from pre-merger notifications, easing the regulatory burden for smaller or unsolicited acquisitions. Higher Filing Fees: The filing fee for Form I has increased from Rs 20 lakh to Rs 30 lakh, while Form II fees have gone up from Rs 65 lakh to Rs 90 lakh, reflecting the more stringent review processes. Appointment of Monitoring Agencies: To ensure compliance with CCI’s orders, monitoring agencies such as accounting firms and management consultancies can be appointed. These agencies will be responsible for reporting any non-compliance with CCI directives. India’s revamped M&A regime signifies a new era of accountability, oversight, and efficiency. The introduction of deal value thresholds, expedited timelines, and enhanced exemptions point to a more sophisticated regulatory landscape. While these changes introduce additional compliance layers, they also promote transparency, making India an attractive destination for global and domestic investments. Businesses must adapt to these new rules, navigating both challenges and opportunities to benefit from the more streamlined M&A process. Source: Business Standard

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Deel Buys Device Management Startup Hofy in a ‘Win-Win’ Acquisition

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The HR tech sector is currently booming, with investment rounds and mergers and acquisitions (M&A) continuing at a brisk pace. The latest news comes from Deel, which has made its third acquisition this year. Read on to find out more about Deel’s purchase of Hofy and what it means for both companies’ existing HR customers. The HR tech market remains robust and resilient despite challenging macroeconomic conditions. Investments into the sector continued unabated, as do HR tech mergers and acquisitions (M&As). The latest M&A news comes from global HR company Deel – it has acquired Hofy, a London-based device management startup. Hofy enables its 700 customers across the world (including Canva, Veeva, and Fujitsu) to equip their teams with work devices in just one click. Hofy also manages the entire lifecycle of the company device. The Hofy acquisition is Deel’s third acquisition in 2024 – back in the spring, Deel bought German performance management company Zavvy and Africa-based payroll giant PaySpace. The latest news with Hofy is a full circle moment for its Co-Founder and CPO Michael Ginzo – he was an early employee at Deel and left in 2020 to start Hofy. A Bright Future for Deel and Hofy? Founded in 2019, Deel has seen impressive growth over the past five years – it now employs 4,000 people in 100 countries, has raised $630 million, has reached a $12 billion valuation, and has $500 million in annual recurring revenue. Deel helps 35,000 companies look after their teams – standout customers include Nike, BCG, Shopify, and Calvin Klein. UNLEASH was keen to find out why purchasing Hofy was the right next move for Deel and its customers. Speaking exclusively to UNLEASH, Deel’s Co-Founder and CEO Alex Bouaziz shares: “By bringing Hofy’s best-in-class services and device lifecycle management in-house, we hope to simplify global business complexities for our customers with a unified platform that handles everything from device delivery and management to software provisioning and app access. Now we’ll be able to handle this in 120+ countries – it’s going to radically simplify device management and IT support for global teams.” For Bouaziz, Deel’s purchase of Hofy is “another way we’re building a simpler, more consolidated infrastructure for global companies and their teams.” Hofy’s Ginzo also spoke to UNLEASH – he adds: “Hofy and Deel share a vision of simplifying hybrid work – including facilitating remote workforces with a hassle-free onboarding experience. I saw a massive opportunity in the global hiring movement when I was working at Deel on the product team. Hofy has helped meet this demand by delivering and managing devices in 120+ countries around the world. We’ve seen huge growth, and now it’s time to take that to the next level. With Hofy joining Deel, customers will be able to enjoy all the benefits of our device management platform, alongside Deel’s compliance, payroll, HRIS, immigration, and people management products. It’s a win-win, and we couldn’t be happier to combine forces.”  

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India Inc Registers 501 Deals Valued at $21.4 Billion in Q2 2024: Report

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India Inc has recorded a total of 501 deals valued at USD 21.4 billion in Q2 2024, according to Grant Thornton Bharat Dealtracker. As per the consultancy firm, Q2 2024 witnessed the highest quarterly volumes in two years, while values declined due to the absence of big-ticket M&A transactions. The merger and acquisition (M&A) and private equity (PE) deals taken together stood at 467, valued at USD 14.9 billion, reflecting a 9 percent increase in volumes but a 28 percent decrease in value, primarily due to the previous quarter’s USD 8.5 billion Reliance-Disney mega-merger, Grant Thornton said. The just-ended quarter featured a one-billion-dollar deal and 30 high-value deals (over USD 100 million), which translates to a 58 percent increase in high-value deals compared to the previous quarter. “Indian corporates are increasingly investing domestically, reflecting strong confidence in the local investment climate,” Grant Thornton said in a release. Despite declining cross-border deals due to geopolitical instability, traditional sectors grew in volumes over the previous quarter. “With recent election results and anticipated policy clarity from the upcoming budget, political stability is expected to boost investor confidence and drive deal activity in the next six months,” it said. Shanthi Vijetha, Partner, Growth at Grant Thornton Bharat, noted that the quarter witnessed robust private equity activity and large domestic deals. “Despite a decline in cross-border deals due to geopolitical uncertainties, domestic investment remained strong. Traditional sectors like pharma and manufacturing also saw strong deal flows, collectively contributing nearly half of the deal values,” Vijetha said. According to Vijetha, the industry anticipates policy continuity, which should positively drive the deal activity.

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Payhawk Looks to M&A After 86% Revenue Jump

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Spend management platform Payhawk is reportedly entering acquisition mode. Co-founder and CEO Hristo Borisov stated in an interview with CNBC on Thursday (June 6) that the company aims to acquire early-stage startups that have already raised significant funds. He asserted that Payhawk has a better “product-market fit” than its competitors, who have achieved multibillion-dollar valuations by offering free corporate cards to other startups. Payhawk issues smart cards for employees to make payments and track expenses, and it has seen significant growth in the first quarter of the year, with revenues up 86% and a 57% increase in customers. To build on this growth, Borisov mentioned that the company hopes to merge with or acquire other firms. “Many businesses that got funded in the last two or three years are now in a position where they’re looking at strategic options,” Borisov said. “This is something we’re actively doing. We’re looking for companies to buy.” “Our vision is to be able to provide a single platform that provides a homogeneous environment for your corporate expense needs with a single provider,” he added. “There is going to be some market consolidation.” These efforts coincide with the shift from traditional expense management methods to digital solutions that speed reimbursement times and reduce the risk of human error. This trend was highlighted in a recent PYMNTS report, which discussed how businesses are embracing artificial intelligence (AI) and machine learning algorithms to optimize procurement and spend management strategies. Edwin Poot and Jonathan Vaux, global chief technology officer and head of propositions and partnerships at Thredd, discussed with PYMNTS how the largest corporations in America still use very old, monolithic systems to manage their treasury functions. Ernest Rolfson, CEO and founder of Payments-as-a-Service solution Finexio, pointed out the inefficiency of manually filing reporting and reconciliations, advocating for automated, digital solutions. Research by PYMNTS Intelligence has shown that virtual cards and digital spend management solutions can help finance departments close books faster while also guarding against fraud.  

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