[Last updated: 1 January 2025, unless otherwise noted]

The current M&A market in Malaysia is expected to accelerate, driven by macro-economic factors and strong foreign domestic investment (“FDI”) into the Malaysian economy.

The current Malaysian Government has courted FDI from all corners and in particular, the US, China, Japan, the EU and the Middle East. Significant new investments have been secured from major companies particularly in the data center industry which forms another significant element of Malaysian participation in the high growth and transformational cloud computing and artificial intelligence sectors. The conclusion of negotiations on the Comprehensive Economic Partnership Agreement ("CEPA") between Malaysia and the UAE in August 2024 is expected to attract new investments into Malaysia, as the CEPA aims to eliminate or reduce tariffs, lower trade barriers, and foster private-sector collaboration. It is expected that the hunger for FDI and the commitment to an open market for M&A activity and post-pandemic economic recovery continue to drive M&A interest in Malaysia in 2025.

Regional private equity houses are expected to continue to be key drivers of M&A, as foreign-currency denominated funds are well placed to take advantage of better valuations against the Ringgit.

In addition, the M&A market is also expected to benefit from the continuing corporate restructuring exercises and consolidation strategies as companies look to unlock value, hive off non-core assets and seek efficiencies.