Shenzhen-listed companies are increasingly active in mergers and acquisitions (M&A) this year, with 54 deals currently in progress (including pending or intent-to-transfer agreements) as of November 17, according to Wind data. Most transactions focus on reinforcing supply chains in emerging industries or upgrading traditional sectors.
Wang Kai, chief strategist at Guosen Securities, noted that these M&A targets are predominantly "hard-tech" firms, with acquirers often backed by strong cash flows. Strategic collaborations enable companies to rapidly integrate cutting-edge external technologies, while vertical mergers enhance competitiveness by consolidating upstream and downstream supply chains. "Shenzhen provides comprehensive support for M&A in both asset and funding dimensions under its '20+8' strategic emerging and future industries framework, helping firms elevate technological barriers and market penetration," Wang added.
**M&A "Toolkit" Bolsters Supply Chains** Shenzhen-listed companies prioritize acquiring advanced technologies to amplify synergies, employing diverse deal structures such as negotiated acquisitions, share issuances, and mergers.
For instance, on October 20, Jame Technology announced plans to acquire control of StrongFit AI, aiming to expand its capabilities in AI servers, management software, and cloud computing. Hu Jiye, a finance professor at China University of Political Science and Law, described this as a bold pivot into AI infrastructure, leveraging Jame’s B2B client base to forge a "second growth curve."
Deal structures vary, with some preferring cash transactions for speed and flexibility, like Shashi Co.’s cash purchase of a 70% stake in Jinghua Electronics, while others opt for stock swaps, such as Emdoor Information’s bid for LongGuo Technology and Chengwei Information. Hu emphasized that these flexible methods form an M&A "toolkit," facilitating industrial upgrades and market expansion.
**Drivers of M&A Surge** Three key factors underpin Shenzhen’s M&A boom: policy incentives, tech sector momentum, and capital exit strategies.
1. **Policy Tailwinds**: Shenzhen’s 2025-2026 venture capital action plan encourages state-backed industrial M&A funds, while its 2025-2027 M&A roadmap targets 200+ deals worth over RMB100 billion by 2027. Wang Kai highlighted municipal support for private firms and specialized SMEs in M&A, alongside state-owned enterprises’ growing appetite for tech assets.
2. **Tech Sector Dominance**: 75% of ongoing deals involve high-tech fields like hardware, electronics, and software, exemplified by Zztech’s acquisition of AAMI’s 87.47% stake, reinforcing Shenzhen’s tech-driven M&A landscape.
3. **Capital Exit Channels**: The establishment of the Shenzhen M&A Fund Alliance in January 2025, with a RMB4 billion fund, aims to position the city as an M&A hub by leveraging resources from listed firms, SMEs, and financial institutions.
