M&A Investors Now More Selective
Global economic uncertainty has caused merger and acquisition (M&A) activity in the mid-market segment to slow throughout 2025. However, numerous delayed transactions remain in the pipeline as investors await more stable market conditions before executing deals.
The M&A Horizons 2026 report released by BDO shows that this slowdown does not fully reflect a decline in investment interest. Many business owners and investors continue to maintain their transaction plans, but have chosen to be more cautious in timing their moves.
In the Asia Pacific region, mid-market transactions have increasingly become a focus for private equity investors. Compared with large acquisitions, investors tend to favour smaller-scale transactions focused on operational improvements.
In Southeast Asia, private equity investment values reached approximately US$9.1 billion through 59 transactions in 2025.
Indonesia remains relatively active in the M&A market with transaction values of around US$6.2 billion from 102 agreements, reflecting sustained investor interest despite more selective investment strategies. According to BDO Indonesia’s Partner Advisory, Marvin Camangeg, this trend has made investors increasingly demanding of deeper due diligence processes before making investment decisions.
“Ensuring the reliability of historical performance is indeed important, but assessing whether the underlying market can support future growth is equally critical. In M&A transactions, the greatest value often emerges from the ability to identify how market dynamics can unlock expansion opportunities beyond current performance,” said Marvin Camangeg.
Traditionally, due diligence processes in M&A transactions have focused on examining financial, tax, and legal aspects to ensure the accuracy of a company’s historical data. However, this approach is no longer considered sufficient, as investors fundamentally purchase future growth potential rather than merely past performance.
In this context, commercial due diligence has become increasingly important. This process evaluates various external factors such as market conditions, industry growth potential, competitive intensity, and customer demand stability.
“This is increasingly relevant in Indonesia, where accelerated digital adoption, changing consumer behaviour, and regulatory developments require companies to ensure business strategies capable of sustaining long-term growth. Comprehensive investment evaluation typically combines financial analysis with commercial analysis to provide a more complete picture of business prospects,” added Marvin Camangeg.
Changes in industry dynamics have also strengthened the need for deeper market analysis. Digitalisation, shifts in global supply chains, and changes in consumer behaviour have shortened the lifecycle of business models and increased the risk of errors in growth projections.
In one evaluation of a manufacturing transaction in Indonesia, for example, a foreign investor found the target company’s financial reports were stable with healthy margins. However, commercial analysis revealed the business’s dependence on a small number of customers and order fluctuations higher than revenue trends indicated.
These findings ultimately influenced the company’s valuation and the post-acquisition strategy designed by the investor. Such experiences demonstrate that acquisition success does not depend solely on verifying financial reports. Investors also need to understand whether a company’s business model can withstand market dynamics and whether the growth projections underlying valuation are truly realistic.
Amid increasing market complexity, investors who combine financial and commercial analysis in their evaluation processes are viewed as being in a stronger position to capture opportunities in the mid-market, particularly in the still-developing Southeast Asian region.