M&A Guide 2026: Taiwan

The current M&A landscape in Taiwan is characterised by cautious optimism amid persistent economic challenges and geopolitical uncertainties. Deal activity continues to be strong, especially within the technology, healthcare, and renewable energy sectors. However, both buyers and sellers are placing greater emphasis on comprehensive due diligence and strategies to mitigate risks. Cross-border transactions are under increased regulatory scrutiny, as governments tighten controls on foreign investments to safeguard national security and critical infrastructure.

Overall, while the M&A market remains vibrant, participants must carefully navigate a more intricate environment shaped by regulatory vigilance, economic pressures, and shifting strategic goals – particularly in cross-border deals where geopolitical considerations are paramount. Taiwan’s M&A scene presents notable opportunities, especially in tech-driven industries, but stakeholders need to pay close attention to regulatory requirements and geopolitical factors. Cross-border transactions continue to be a focal point, with a strong emphasis on strategic fit, compliance, and risk management.

The M&A market in Taiwan is driven by both private and public transactions. While there were several notable public M&A deals in 2024 and 2025, private transactions also played a significant role. Key sectors experiencing active M&A activity include energy, e-commerce, and retail chains, as well as AI and emerging technology companies. However, investment from companies based in the People’s Republic of China (PRC) or those with PRC ties has declined, largely due to the evolving political climate and heightened cross-strait tensions.

In 2025, Taishin Financial Holding Company and Shin Kong Financial Holding Company successfully completed their merger, attracting considerable public attention. After the announcement of this deal, CTBC Financial Holding Co., Ltd. submitted an application to the Financial Supervisory Commission (FSC) seeking approval for a public tender offer to acquire shares of Taishin Financial Holding Company. This request was ultimately denied by the FSC.

These developments highlight a broader trend of consolidation and strategic realignment among Taiwan’s major financial institutions. Moreover, they underscore the FSC’s clear preference for amicable mergers over hostile takeovers, reflecting its commitment to sound financial governance and the protection of public interests.

In response to CTBC’s hostile takeover attempt, the FSC implemented significant amendments to the Financial Holding Company Investment Management Regulations in late 2025. These revisions strengthen the regulatory framework, supporting consensual mergers by, among other measures, raising the investment threshold for acquisitions from 10% to 25% and mandating cash consideration for such transactions.

In 2025, M&A deal flow in Taiwan remained largely on par with 2024, reflecting a cautious market environment influenced by ongoing tariff tensions. While economic fundamentals remained relatively stable, many investors adopted a wait-and-see approach due to uncertainties surrounding trade policies. As a result, the number and total value of transactions showed little significant growth compared to the previous year.

Key sectors such as AI, technology, healthcare, and renewable energy continued to attract interest, but overall deal activity was tempered by the need for greater risk assessment amid geopolitical challenges. This cautious stance contrasted with the more dynamic momentum seen prior to the escalation of tariff disputes.

The technology industry is undergoing a significant transformation and upgrade, primarily through cross-border M&A, with the aim of establishing a comprehensive and efficient supply chain. Furthermore, there is a trend towards the integration of the biotechnology sector and semiconductor supply chain. It is anticipated that strategic collaborations and investment integrations between related companies will accelerate in 2026.

In addition, the AI industry is expected to experience increased deal flow as companies seek to enhance capabilities through acquisitions and partnerships, driving innovation and competitive advantage. Similarly, the financial institution industry is likely to see heightened M&A activity as firms pursue digital transformation, resource integration, and expansion into new markets.

Overall, inbound and outbound M&A patterns are projected to grow in volume and value across these sectors, supported by jurisdiction-specific drivers such as technological advancement, regulatory developments, and market demand.

There have been several driving forces in the structuring of M&A deals in Taiwan. For example, given that the Business Mergers and Acquisitions Act, as amended in 2016, allows for more flexibility in terms of the form of the consideration that an acquirer may offer to the shareholders of a target company, it becomes easier for an acquirer to achieve a 100% equity interest acquisition. This was evidenced by the increasing popularity of the cash-out share exchange structure in 2018 and 2019. Through 2020 to 2025, the slowing down of major transactions appears to reflect public calls for more stringent disclosure and voting requirements for cash-out deals and delistings.

Meanwhile, Taiwan’s government has promulgated amendments to laws and regulations governing PRC investors’ investment in Taiwan to prevent the circumvention of investment control. For example, according to the amendments:

• Stricter criteria were adopted for identifying PRC investment made through a third-area intermediary; and

• PRC investors wishing to control a Taiwanese company (other than those listed on the Taiwan Stock Exchange or the Taipei Exchange, or traded over the Emerging Stock Market of the Taipei Exchange) via a contractual arrangement are also required to apply for regulatory approval.

Given the above, transactions must be carefully structured to meet the requirements applicable to PRC investors when making an investment in Taiwan.

During the past decade, big-ticket M&A in Taiwan has been mostly driven by strategic investors. Financial investors have primarily participated in M&A as co-investors or as acquirers of minority stakes in companies.

Since 2018, however, there has been a trend of financial investors returning to the market after being silent for almost a decade. A series of deals – including KKR’s take-private acquisition of LCY, Morgan Stanley’s take-private acquisition of Microlife, Blackrock’s acquisition of a solar portfolio, and Permira’s investment into aquaculture feeds company Grobest – were led by private equity funds. There were still several transactions initiated by private equity funds through 2020 to 2024, such as the take-private acquisition of On-Bright by Magicapital, Pavilion Capital, and Axiom Capital in 2020; the take-private acquisition of Ginko by Baring Private Equity Asia in 2021 and 2022; and the acquisition of TE Connectivity’s Hirschmann Car Communication segment by Phi Capital in 2023.

In response to the Taiwanese government’s ambitious effort to promote renewable energy, M&A transactions in the energy sector continued to thrive in 2025, largely driven by foreign and local financial investors. The notable examples are several sell-downs of offshore wind farm developers, as well as a number of large-to-mid-size investments in the solar power plant industry. There have also been quite a few global asset management firms continuing their involvement in building and acquiring Taiwan's internet data centres.

Additionally, Gogoro and Gorilla Technology Group went public on the Nasdaq through mergers with SPACs in 2021. In 2022, Perfect Corp. went public on the New York Stock Exchange through a merger with a SPAC. In 2024, Taiwan Color Optics and TNL Mediagene went public on Nasdaq through mergers with SPACs. However, de-SPAC activities appeared to be slowing down in 2025.

The main statutes governing M&A activity in Taiwan are the Business Mergers and Acquisitions Act, the Company Act, the Securities and Exchange Act, and the Fair Trade Act. The Securities and Exchange Act includes tender offer rules that regulate tender offers for acquiring shares of public companies. Other statutes that may also be relevant in M&A activity include the Labor Standards Act, investment regulations on foreign investors and investors from the PRC, and tax laws and regulations.

The Securities and Futures Bureau of the FSC, the government agency responsible for public companies, is the main regulatory body in charge of public M&A transactions. The other relevant regulatory bodies include the FTC, the authority in charge of merger clearance, and the Department of Investment Review, the authority in charge of reviewing foreign and PRC investments. If the target engages in businesses that require a special licence, the competent authority for the special licence may also review the transaction.

In January 2026, the FTC amended the Thresholds and Calculation of Sales Amount which Enterprises of a Merger shall File with the Fair Trade Commission by increasing the relevant sales thresholds. This amendment was implemented to better align with current economic conditions and to alleviate regulatory burdens on transaction parties. The key amendments include:

• The aggregate global sales of all participating enterprises in the preceding fiscal year exceed TWD 50 billion (previously TWD 40 billion), and at least two participating enterprises each had Taiwan sales of over TWD 3 billion (previously TWD 2 billion) in the preceding fiscal year;

• Where the participating enterprises are non-financial institutions: a participating enterprise had Taiwan sales of over TWD 20 billion (previously TWD 15 billion) in the preceding fiscal year, and the enterprise merging with it had Taiwan sales of over TWD 3 billion (previously TWD 2 billion) in the preceding fiscal year; and

• Where the participating enterprises are financial institutions: a participating enterprise had Taiwan sales of over TWD 40 billion (previously TWD 30 billion) in the preceding fiscal year, and the enterprise merging with it had Taiwan sales of over TWD 3 billion (previously TWD 2 billion) in the preceding fiscal year.

Additionally, in late 2025, the FSC introduced significant amendments to the Financial Holding Company Investment Management Regulations, providing clearer guidance for financial holding companies engaging in M&A activities:

• Financial holding companies must use cash for initial investments in public companies to minimise stock price volatility;

• The initial investment must secure at least a 25% stake in the target company;

• The acquirer must submit a reasonable and feasible plan outlining the initial investment strategy;

• A period for double leverage ratio adjustments has been introduced to better align with market practices;

• Decisions by the board must be supported by opinions from the audit committee and independent experts;

• Details of tender offers must remain confidential until regulatory approval is obtained, to prevent market disruption; and

• An applicant whose investment application is rejected cannot apply to invest in the same target for one year.

The Executive Yuan has submitted a draft amendment to the Business Mergers and Acquisitions Act, which is pending legislative review. The proposed amendment seeks to encourage the establishment of industrial holding companies through share swap transactions by introducing tax deferral mechanisms.

Specifically, shareholders of the acquired company may defer securities transaction income tax when exchanging their shares for those of the acquiring company, provided certain criteria are met and the acquiring company is recognised as an industrial holding company by the National Development Council. The draft amendments also impose reporting obligations on acquiring companies to ensure proper documentation and safeguard tax revenue, with penalties for non-compliance.

Once implemented, these changes are expected to promote business integration among Taiwanese enterprises.

Information disclosure and insider trading are crucial considerations for public companies in Taiwan. Unfortunately, local management often neglects their significance and fails to make the proper disclosures. Insider trading violations have frequently occurred in large public M&A transactions, leading to numerous criminal investigations. Management has repeatedly tried to manipulate the stock prices of public companies or to intentionally buy/sell the shares of the target before the material non-public information is legally and properly disclosed to the market, for their own improper gains. There were reports of insider trading issues in several notable deals in recent years.

This type of misconduct harms the buyer’s trust and the seller's credibility. For example, if the price increases unreasonably before the information is disclosed, the buyer might ask for a cooling-off period or even cancel the transaction.

Public companies should pay more attention to information disclosure when they plan M&A transactions. This includes understanding what information should be disclosed and the proper timing for disclosing certain pieces of information to the market. Most importantly, public company insiders must refrain from trading any shares in the public company before proper information disclosure. Professional advice should be sought regarding this issue.

In addition, M&A transactions are often subject to regulatory approvals, such as foreign investment approvals or PRC investment approvals. Industries that require a special licence/permit – such as banking, securities firms, and insurance companies – need to obtain prior approval from the competent authority, such as the FSC. Meanwhile, any M&A transaction that triggers the pre-closing merger filing threshold must obtain merger clearance before closing.

Given all these requirements, obtaining the proper regulatory approvals is critical to the completion of an M&A transaction in Taiwan. Investors intending to conduct an M&A transaction in Taiwan should therefore seek professional advice in advance to better understand the regulatory requirements and application process.

Technology facilitates more efficient and thorough due diligence processes. Virtual data rooms and AI-powered tools allow for secure document sharing and an efficient review process. Communications among the stakeholders are also enhanced by the technology. Public companies may hold video-aided shareholders’ meetings, and the use of videoconferencing in corporate meetings has become prevalent in private companies in the post-COVID era. Moreover, technology plays a vital role in post-closing integration. Project management software and integration platforms assist in planning and aligning the disparate systems and cultures between the entities.

Given that under the Taiwanese Company Act, material decisions require the approval of shareholders holding two-thirds of the voting shares present at a shareholders’ meeting, in order to gain absolute control of a public company, an acquirer should aim to acquire or control at least 67% of the shares. In practice, given that not all shareholders attend shareholders’ meetings, to control the management or operation of a listed company, it is sometimes enough for one investor to control 30% to 40% of the voting rights in a listed company. In sum, this would largely depend on the dispersion of the shareholding structure of the listed company.

The local practice is that:

• The conditions of a tender offer usually include the minimum and maximum number of shares that the shareholders of the target company agree to tender during the tender offer period;

• The tender offeror obtains the required government approvals, if any (such as merger clearance and foreign investment approval); and

• There is no occurrence of any material adverse event (subject to the approval of the FSC).

Among others, with respect to the condition of obtaining the required government approvals, given that the securities regulator has changed its position and no longer requires the tender offeror to launch a tender offer immediately after the deal is announced, the tender offeror may elect to file the applications for government approvals with governmental authorities in relevant jurisdictions much earlier than the time the tender offer is launched so as to obtain the required government approvals before the expiry of the tender offer period.

A no-shop clause restricting the selling party from pursuing a transaction similar to the proposed transaction during the exclusivity period is not uncommon. In recent years, break fee arrangements have been structured based on the occurrence of certain trigger events. Buyers may also negotiate with major shareholders of the target companies and enter into tender agreements or voting agreements to increase the certainty of the deal.

Large private M&A transactions often adopt a completion accounts mechanism under which the purchase price is adjusted in accordance with the post-closing audit of the financial status of the target company, as at the closing date. For transactions with a smaller value, it is more common for the parties to adopt the locked-box mechanism, which has become more and more popular in recent years. Earn-out mechanisms and escrow arrangements are commonly seen in private M&A transactions. Recently, warranty and indemnity insurance has been increasingly adopted in local deals by sellers and buyers, but the prevalence has fallen post COVID.

The customary closing conditions attached to a private takeover offer usually include that:

• The seller’s representations and warranties remain true and correct;

• The required government approval (if any) has been obtained;

• The required third-party consent (if any) has been obtained;

• No material adverse event has occurred;

• No action or government order is seeking to deter or enjoin the proposed M&A transaction; and

• Other commercial arrangements required by the parties have been completed or achieved (this would usually be structured based on the due diligence findings).

If any party in a private M&A transaction belongs to a foreign corporate group, that party would normally require that the transaction documents be governed by the law of the foreign country where the headquarters of the group is located. Any dispute arising from the transaction documents will then be resolved via the court of a foreign jurisdiction or an arbitration proceeding conducted outside Taiwan. Local parties would normally accept such arrangements.

The IPO market in Taiwan is generally perceived as serving the purpose of fundraising rather than exiting, due to lock-up requirements, minimum shareholding requirements, legal requirements, and limitations on selling shares that are applied to major shareholders, directors, and supervisors. For the major shareholders of a public company who wish to sell their shares to a potential buyer, a mandatory tender offer may be triggered if more than 20% of the shareholding will be transferred within 50 days. Consequently, a major shareholder’s exit in the open market may be treated as a trade sale.

On the other hand, trade sales or sales to financial sponsors have always been a major exit route. Other than highly regulated industries (such as media or cable TV) or acquisitions involving PRC funding, there should be no substantial hurdle for an exit, albeit that the regulatory approval process may sometimes take a long time. As for highly regulated industries and investments involving PRC funding, the Taiwanese government has been criticised for a prolonged regulatory approval process and lack of transparency in its decision-making process.

Considering the government’s conservative attitude towards PRC investment, similar to the trend in 2025, transactions involving PRC funding are expected to be less likely to take place in 2026. Given that investments made by PRC investors through the ‘control via contract’ structure (e.g., a variable interest entity structure) also require regulatory approval under the amended scheme, it is anticipated that there will be more enquiries regarding the alternative structures to achieve cross-strait collaboration.

Additionally, due to the uncertainty surrounding US trade policies towards the PRC and China’s slowing economic growth, Taiwanese companies are adopting a more cautious approach to M&A activities in the PRC market. Consequently, the US, Southeast Asia, and Japan are emerging as preferred destinations for M&A, with activity in these regions expected to remain robust through 2026.

Another significant factor shaping the M&A landscape is the rapid advancement of AI technology. As companies worldwide seek to expand their AI-related businesses and acquire critical technologies, large corporations are increasingly pursuing M&A to consolidate both upstream and downstream sectors of the AI industry. AI-related M&A is therefore poised to be a prominent trend in the coming years.

However, the global political environment remains highly unstable. The military conflict involving the US, Israel, and Iran – which escalated in early 2026 – introduces considerable uncertainty to the global market, particularly regarding energy supply chains and oil prices. The full impact of this conflict on M&A activity is difficult to predict. Should the war significantly affect the global economy, a corresponding decline in M&A transactions may occur. Continued monitoring of international developments and their potential effects on the M&A market is recommended.