Tariff and M&A

The current Trump-style tariff wave—particularly if it escalates into broader trade protectionism—could have several ripple effects on M&A activities involving Asian companies. Here’s a breakdown of the key impacts to expect, especially from the perspective of founders:

🔧 1.  Valuation Volatility

• Export-reliant businesses in Asia (esp. manufacturing, electronics, and textiles) may face margin compression due to tariffs on goods bound for the U.S.

• This could depress valuations or increase deal complexity with contingent earn-outs or downside protection clauses.

• Strategic buyers may see bargain opportunities, especially in distressed or low-multiple segments.

  
  

🌍 2. Shift in Buyer Interest / Supply Chain Recalibration

• Buyers (especially U.S.-based or global firms) may pivot toward acquiring assets in Southeast Asia (Vietnam, Thailand, Indonesia) as part of a “China+1” strategy.

• Expect increased M&A in logistics, warehousing, and nearshoring capabilities.

• Some companies may look to acquire factories or teams in tariff-neutral countries to hedge supply chain risks.

  
  

📈 3. PE and Strategic Investor Behaviour

• Private equity firms may become more cautious, focusing on businesses with domestic demand or diversified markets.

• However, some might take a contrarian bet, acquiring undervalued assets likely to recover post-tariff cycles.

• Strategic buyers may pursue vertical integration to control cost exposure or bring more of the supply chain in-house.

  
  

💸 4. Cross-border Deal Scrutiny and Nationalism

• Governments may react with tightened FDI rules or protectionist policies to defend strategic industries.

• This can slow deal timelines or block sensitive cross-border deals—especially in tech, data, or infra.

  
  

🔄 5. Recap & Partial Exits Over Full Exits

• Founders may prefer recapitalisation or minority exits to full sales, preserving the upside while hedging against short-term uncertainty.

• Buyer structures may lean toward staggered payments or performance-linked consideration due to unpredictability.