Taiwan’s M&A recovery: outbound growth, tighter regulation, and strategic consolidation

In recent years, Taiwanese companies have become increasingly active in outbound M&A transactions. In 2025, Taiwan’s M&A market showed clear signs of recovery despite the ongoing uncertainty arising from US tariff policies and broader geopolitical tensions. The market has been primarily driven by three forces:

• The rapid growth of the AI and semiconductor sectors;

• The reconfiguration of global supply chains; and

• Continued industrial expansion or transformation.

Conversely, inbound M&A activities (including investments by global private equity funds) have continued to decline compared with the previous year, largely due to the heightened tensions across the Taiwan Strait. In parallel, the foreign investment authority – the Department of Investment Review, within the Ministry of Economic Affairs (MOEA) – has adopted a more stringent approach in reviewing investment applications submitted by People’s Republic of China investors. This has resulted not only in longer review timelines, but also in increased scrutiny in sensitive and high-tech sectors, reflecting a more cautious regulatory stance to safeguard critical technologies and protect strategic know-how.

Both private and public M&A transactions drive Taiwan’s market. In 2024 and 2025, public M&A drew significant attention through landmark financial sector mergers, while private M&A remained robust across sectors.

In recent years, multinational corporations have actively pursued acquisitions of Taiwanese private companies, primarily driven by strategic considerations such as market entry or supply chain integration. Additionally, domestic consolidation among Taiwanese private companies continues to be driven by the goal of industrial transformation.

In December 2024, the Taiwan Fair Trade Commission (FTC) blocked the proposed acquisition of Foodpanda Taiwan’s business by Uber Eats on the basis that the combined entity would have an excessively high market share in the food-delivery platform market, and that no remedial measures could adequately address the competition concerns. On March 10 2025, the parties terminated the deal, triggering a break-up fee of approximately TWD 8.2 billion ($250 million). The FTC’s position in this transaction demonstrates its firm willingness to prohibit high-profile deals where competition concerns cannot be adequately addressed or remedied.

In addition, Taiwan’s financial sector has experienced a notable wave of consolidation since 2024, with several high-profile transactions – including the merger between Taishin Financial Holding and Shin Kong Financial Holding, and the acquisition of Mercuries Life Insurance by E.Sun Financial Holding. These transactions also brought into focus the critical role of regulatory support, particularly from the Financial Supervisory Commission (FSC).

These deals indicate that both antitrust clearance and sector-specific approvals play a decisive role in ensuring deal certainty. As a result, risk allocation mechanisms and related considerations are expected to remain among the most critical factors in M&A transactions going forward.

The Business Mergers and Acquisitions Act (BMAA) serves as the key regulation for M&A in Taiwan. Public M&A transactions are further subject to the Securities and Exchange Act (SEA) and relevant regulations promulgated thereunder, including tender offer regulations, disclosure requirements, and insider trading rules, and any other sector-specific regulations, such as the Financial Institutions Merger Act. Depending on the industry, additional sector-specific approvals may be required, particularly in regulated industries such as financial institutions and telecommunications.

The key regulatory authorities include:

• The FSC, which oversees securities and public company transactions;

• The Department of Investment Review, for foreign investment approvals; and

• The FTC, which reviews transactions from a merger control perspective.

In response to increasing concerns over the outflows of core technologies, the Taiwanese government is undertaking a reform of the outbound investment regulatory regime. Under current law, outbound investments exceeding TWD 1.5 billion require prior approval from the Department of Investment Review. Historically, Taiwan has maintained a relatively relaxed investment review framework for outbound investments, with more stringent scrutiny for transactions involving mainland China, Hong Kong, and Macau. However, in October 2024, the MOEA published a draft amendment to the Statute for Industrial Innovation, which sets forth a more proactive review for outbound investments.

The amendment proposes a three-pronged control standard – investment destination, industry or technology involved, and the transaction size – any one of which may trigger a pre-investment approval requirement. Specifically, the regime will encompass investments into jurisdictions designated as sensitive or high risk (such as mainland China, Iran, North Korea, and other jurisdictions subject to strategic export controls), as well as transactions involving critical technologies, including those identified by the National Science and Technology Council, R.O.C.

In addition to the fines, the reform introduces substantive administrative tools previously unavailable under the existing regime, such as partial denials, transaction-specific conditions, and pre-implementation divestiture or suspension orders. Importantly, the proposed amendment broadens the regulatory scope by allowing regulators to intervene in high-risk outbound transactions below the TWD 1.5 billion threshold. These measures are intended to safeguard national security, prevent the unauthorised dissemination of critical technologies, and maintain Taiwan’s industrial competitiveness within strategically significant sectors.

The effective date of the amendments remains undetermined and shall be announced by the Executive Yuan.

In August 2025, the Executive Yuan approved proposed amendments to the BMAA, focusing on facilitating corporate restructuring through the formation of industrial holding companies. In the current legal framework, shareholders may be subject to immediate taxation on securities transaction gains when conducting a share swap transaction.

To address this, the proposed amendments introduce a tax deferral mechanism for qualified share swap transactions. Where the transaction is a share swap deal under the BMAA and the acquiring entity is recognised by the Taiwan regulator as an “industrial holding company”, shareholders may elect to defer their gains from the transaction in the current year’s taxation basis until the shares are subsequently transferred. Further implementing rules – including eligibility scale, structure, operational scope, and procedural requirements – are expected to be formulated by the National Development Council and tax authorities to prevent misuse of the regime.

These tax measures are set to launch simultaneously with their respective sub-regulations on a date to be finalised by the Executive Yuan.

In the past, Taiwan’s M&A market has been commonly perceived as a domestic-driven, inward-looking market. However, in recent years, Taiwanese companies have been among the most active outbound acquirers/investors in Asia, leveraging M&A as a strategic tool for technology upgrading, supply chain diversification, industrial transformation, and geographic expansion.

Driven by increasingly stringent ESG regulations in Taiwan and growing sustainability expectations from global investors and supply chain partners, Taiwanese industrial conglomerates are accelerating their industrial transformation from traditional manufacturing towards low-carbon technologies and renewable energy solutions. For example, Taiwan Cement Corporation (TCC) advanced its decarbonisation strategy through two landmark acquisitions of Portugal’s Cimpor and Turkey’s OYAK Cement in 2024. Similarly, Formosa Plastics Group has increasingly advanced its footprint in the renewable energy sector, including multiple investments all over the world in the energy storage business.

A notable example of Taiwan’s outbound M&A activity in the technology sector is ASMedia Technology Inc.’s acquisition of Techpoint, Inc., a Japan-listed integrated circuit design company, in January 2025. The transaction was an all-cash deal valued at approximately $390 million, representing a premium of approximately 170% over Techpoint’s prevailing market price. Strategically, the transaction enables ASMedia to expand beyond its existing business and is expected to generate synergies through the integration of technologies and products, enhancing its ability to offer more comprehensive solutions to global customers.

Another landmark outbound transaction was the acquisition of Pioneer Corporation by CarUX Holding Limited, a subsidiary of Innolux Corporation. CarUX acquired 100% of Pioneer’s share capital at an equity value of approximately JPY 163.6 billion. From a strategic standpoint, the transaction represents a significant step in CarUX’s evolution from a display-focused supplier into a full-service tier one provider of integrated smart cockpit solutions. In addition to product synergies, the deal provides access to Pioneer’s established relationship with Japanese and global original equipment manufacturers, facilitating entry into the high-barrier automotive supply chain.

The introduction of a comprehensive tariff policy by the US in April 2025 has materially influenced the corporate strategy of Taiwanese companies. To mitigate tariff exposure and supply chain risk, Taiwanese companies have accelerated geographic diversification of their production bases, expanding manufacturing capacities in the US, Europe, and Southeast Asia.

In March 2025, Taiwan Semiconductor Manufacturing Company announced an additional $100 billion investment in the US, bringing its total US commitment to $165 billion, which is expected to catalyse another wave of outbound investments and acquisitions by Taiwanese companies across the semiconductor supply chain and related service providers, such as financial institutions supporting cross-border expansion.

The legal regime to acquire control of a Taiwanese public company includes:

• A mandatory or voluntary tender offer under the SEA;

• A merger or share exchange (share swap) under the BMAA;

• Open-market purchases followed by a shareholders’ meeting to re-elect the board of directors; or

• A combination of a tender offer followed by a merger or share exchange (share swap).

In competitive or hostile bids, the acquirer must comply with the mandatory tender offer rules, including the obligation to file with the FSC after the transaction is announced, and disclose the legally required information, including price range, tender offer period, the tender offer prospectus, legal opinion, proof of ability to perform payment of the tender offer consideration, and any agreements made with the major shareholders in the target company.

In practice, the vast majority of M&A transactions in Taiwan are consensual, particularly those requiring prior regulatory approval. In November 2025, the FSC passed an amendment to the Regulations Governing the Investing Activities of a Financial Holding Company, raising the minimum shareholding thresholds for a financial holding company’s initial investment in another financial institution from 10% to 25%. This development has sparked industry debates as to whether the higher threshold may effectively close the door on hostile takeovers involving financial holding companies.

Furthermore, public M&A transactions in Taiwan are largely constrained by statutorily prescribed frameworks and procedural requirements. As a result, parties have relatively limited flexibility to deviate from these established structures, compared with private M&A transactions.

In Taiwan, conditions attached to a public takeover offer are typically centred on regulatory approvals. Among others, obtaining clearance from competent authorities – most notably the FSC and, if applicable, the FTC – is often the most critical gating item of public takeovers.

Foreign acquirers frequently underestimate the time required for regulatory approvals, particularly when multiple regulators are involved (e.g., merger control clearance, foreign investment approvals, and FSC approvals). The Taiwan regulators have not adopted a unified one-stop approval process.

In practice, Taiwan regulators place particular emphasis on adequacy disclosures, requiring the acquirer to provide transparent and timely access to M&A information to ensure market integrity and for minority shareholders’ protection. In addition, conflict of interest issues are also a key factor during the review process. Any conflict of interest (including a detailed explanation of a director’s interest in the transaction) is required to be disclosed in the meeting agendas of the shareholders’ meeting of the target company.

From an execution perspective, early-stage planning of regulatory filing strategy and disclosure positioning is critical throughout the public takeover process. Any misalignment in the scope or consistency of disclosures across public filings, public announcements, or transactional documents may give rise to regulatory concerns and may result in delays in obtaining regulatory approvals.

The following deal protection measures are available in public M&A in Taiwan.

Since an amendment to the BMAA in 2016, listed companies are required, before adopting any resolutions on M&A transactions by the board of directors, to form a special M&A committee or have the existing audit committee review the fairness and reasonableness of the M&A plan and the related transactions. The M&A committee or audit committee must seek an opinion from an independent expert on the fairness of the acquisition price and report its findings to the board and shareholders’ meeting.

Upon approval by the board of directors, the M&A transaction proposal will be submitted to the shareholders’ meeting. Shareholders who dissent in writing or verbally with a record made in writing before or during the shareholders’ meeting may waive the voting right and request the company to buy back their shares at a fair price. Over the years, courts have determined the fair value for dissenting shareholders’ buyback requests based on the closing price on the date of the shareholders’ meeting that approves the M&A transaction.

In January 2020, the Commercial Case Adjudication Act was enacted, empowering the Intellectual Property and Commercial Court to adjudicate major business disputes and disputes concerning shareholders of publicly traded companies exercising shareholders’ rights. This act provides for an expeditious and professional process by implementing a mandatory mediation process, requiring mandatory legal representation, and introducing expert witnesses.

The deal structures (including consideration and price adjustment mechanisms) are relatively flexible in private M&A transactions. In practice, the choice between locked-box mechanisms, completion accounts, earn-outs, or escrow arrangements is largely driven by commercial considerations.

In private M&A transactions, the completion of a takeover is typically subject to a range of conditions precedent, including:

• The completion of legal, financial, and commercial due diligence;

• The remediation of any identified non-compliance issues prior to closing;

• Absence of a material adverse change in the target’s business, operations, or financial conditions; and

• Obtaining all necessary third-party consent, particularly where key contracts contain change of control provisions that may be triggered by the transaction.

The choice of governing law and the dispute resolution mechanism is primarily based on the parties’ negotiations. It is common practice in Taiwan’s cross-border private M&A transactions for parties to choose a foreign governing law – most frequently Singapore or Hong Kong laws – to submit disputes to international arbitrations such as the Singapore International Arbitration Centre or the Hong Kong International Arbitration Centre. Purely domestic transactions are typically governed by Taiwan law, with disputes resolved by Taiwanese courts or the Chinese Arbitration Association, Taipei.

While IPOs remained an attractive option for companies with strong growth profiles and clear market positioning, private sales to strategic buyers or financial sponsors are often perceived as offering greater deal certainty and structure flexibility, as private sales allow for more tailored arrangements, including flexible consideration mechanisms and post-closing governance frameworks.

Taiwan’s outbound M&A market is likely to remain robust in 2026, driven in particular by Taiwanese companies expanding their presence in the global AI supply chain and the semiconductor sector. These strategic expansions are expected to sustain deal flow as companies seek to secure upstream and downstream capabilities and enhance international competitiveness.

By contrast, inbound M&A may remain relatively subdued in the near future due to ongoing geopolitical uncertainties across the Taiwan Strait. A more meaningful recovery in inbound transactions is likely to depend on improved geopolitical stability and greater regulatory clarity.