Malaysia

In Malaysia, M&A transactions are typically carried out through share acquisitions, share subscriptions, asset/business acquisitions and, where appropriate, via statutory processes such as schemes of arrangement, amalgamations and takeover offers. The choice of approach typically depends on various factors such as the nature of the industry that the business operates in, the commercial objectives, how risks are distributed, the level of complexity involved, tax implications and regulatory requirements.

Share acquisition

A buyer can acquire ownership of a target by purchasing its shares, effectively taking over the company with all its assets, liabilities and existing obligations. For public listed companies, such acquisitions may be carried out via open market purchases or direct business transactions (DBT) in compliance with the Companies Act 2016 (CA), the Capital Markets and Services Act 2007 (CMSA), the Malaysian Code on Take-Overs and Mergers 2016, the Rules on Take-Overs, Mergers and Compulsory Acquisitions 2016 (collectively, the “Takeover Rules”), the listing requirements issued by Bursa Malaysia Securities Berhad (“Listing Requirements”) and the relevant guidelines issued by the Securities Commission Malaysia (SC). Share acquisition is generally the preferred structure for M&A in Malaysia, as it is straightforward to implement and allows the business to continue operating with minimal disruptions. The target’s contracts, licences and employees generally remain in place, subject to any change of control restrictions.

Key distinction: the purchaser acquires ownership of the target together with all the target’s existing and contingent liabilities.

Share subscription

A buyer can also acquire ownership of a target by subscribing for its shares, resulting in a dilution of the existing shareholders, thus effectively taking over the company with all its assets, liabilities and existing obligations. The subscription will need to comply with the CA and, where applicable, the CMSA, the Takeover Rules, Listing Requirements and the relevant guidelines issued by the SC. This structure is typically adopted where the company requires funding for its business and operations. And is relatively straightforward to implement. It allows the business to continue operating with minimal disruptions. The target’s contracts, licences and employees generally remain in place, subject to any change of control restrictions.

Asset or business acquisition

The buyer acquires all or selected assets, contracts and liabilities of the target under an asset or business transfer agreement. This structure is commonly used where the buyer seeks to avoid any existing or potential exposure to risks or liabilities of the target, or where the buyer seeks to acquire only a selected part of the business, or where it is not feasible to acquire the shares in the target. Such transactions typically involve transferring, assigning or novating each asset and contract individually and often requires consent from relevant third parties Employees are not automatically included and must be separately transferred or rehired under new arrangements.

Key distinction: the buyer may select the assets and liabilities to be acquired. While this approach can help to limit existing or potential liabilities, it typically involves a more complex execution process and may incur higher transaction costs as compared with a share acquisition or share subscription, such as stamp duty.

Other structures and processes

Schemes of arrangement and amalgamations under the CA provide statutory mechanisms for implementing acquisitions and reorganisations, with outcomes that become binding on the minority shareholders once approved by the court.

In regulated sectors, laws such as the Financial Services Act 2013 and the CMSA permit the transfer of assets and liabilities through vesting orders approved by the court.

In addition, auction processes are frequently adopted in private M&A transactions as a competitive method of sale involving multiple rounds of bidding. Auction processes are commercially driven rather than a distinct legal structure.

M&A activity in Malaysia has remained relatively resilient with transaction volumes gradually improving and total deal value reaching approximately USD 8.3 billion in 2024 despite a wider slowdown across the Asia-Pacific region. This momentum is anticipated to remain robust going into 2026. Most deals continue to fall within the mid-market segment, typically ranging between USD 10 million to USD 200 million range, although overall value is largely influenced by a small number of sizeable transactions. Notably, the privatisation of Malaysia Airports Holdings Berhad (MAHB), valued at approximately RM 18.4 billion (about USD 4.2 billion) involving Global Infrastructure Partners and Abu Dhabi Investment Authority, significantly boosted overall deal value.

Against this backdrop, deal activity remains largely concentrated in sectors such as technology, media and telecommunications, energy and renewables, healthcare, and manufacturing, reflecting Malaysia’s role as a regional hub for digital infrastructure, industrial development and energy transition initiatives. The investor base comprises a mix of domestic and international strategic investors, alongside a growing presence of private equity, particularly in mid-market transactions.

In the 12–24 months leading up to early 2026, the Malaysian M&A scene has experienced a robust rebound in deal activity.

Key M&A trends include:

• ESG-driven dealmaking. There is a growing emphasis on energy transition, renewables and decarbonisation, supported by national policy initiatives such as the National Energy Transition Roadmap. ESG considerations are also increasingly important in due diligence, valuation and deal structuring, particularly within the manufacturing and plantation sectors.
• Macroeconomic and supply chain drivers. Strong foreign investment in the services and manufacturing sectors continue to support deal activity. A stable domestic environment, together with weaker ringgit has encouraged inbound investment, while “China+1” supply chain shifts have boosted activity in electrical and electronics (E&E), semiconductor-related manufacturing, logistics and data centres, including within the Johor–Singapore Special Economic Zone.
• Private equity and sector-focused investment. There has been continued investor interest in sectors such as healthcare, education, consumer and technology sectors, alongside on-going mid-market consolidation in areas like IT services, logistics and industrial businesses.
• Digital infrastructure and data centres. Malaysia’s role as a regional data centre hub is likely to sustain deal activity in infrastructure, including fit-out, power and cooling systems, supported by cloud services and AI expansion.

Over the next 12–24 months, Malaysia’s M&A activity is expected to remain selective and policy-driven, with overall deal volumes projected to grow, focusing primarily on priority sectors.

Key predictions include:

• Semiconductors and advanced manufacturing. Continued consolidation and strategic investment in electrical and electronics (E&E) and semiconductor-related manufacturing, as Malaysia strengthens its role in regional supply chains.
• Energy transition and infrastructure. Continued investment in renewable energy and energy-enabling infrastructure, supporting transactions across the power and utilities value chain.
• Digital infrastructure and data centres. Sustained transaction activity in data centres and supporting infrastructure (including power, cooling and connectivity), particularly in Johor and the Klang Valley.
• Real estate, logistics and industrial assets. Continued activity in industrial, logistics and data centre-linked assets, supported by demand in Johor and the Johor–Singapore Special Economic Zone. While asset recycling and monetisation strategies via real estate investment trusts (REITs) continue to be a primary strategy, recent tax changes may dampen investor appetite for REITs.
• Private capital and sector consolidation. Private equity and strategic investors are expected to continue targeting healthcare, education, consumer and technology sectors, with a focus on mid-market consolidation and bolt-on acquisitions.
• Regulatory developments. The introduction of a cross-sector merger control regime is expected to affect deal structuring, timing and execution, requiring earlier competition analysis and potentially extending transaction timelines.

Primary Regulators

There is no single regulator which oversees M&A activity in Malaysia. The following principal regulators may be involved in the type of M&A transactions being undertaken:

• SC. The SC oversees transactions involving take-overs of listed companies and acquisition of companies carrying on regulated activities.
• Companies Commission of Malaysia (CCM). Administers and enforces the CA.
• Bursa Malaysia. Malaysian stock exchange which oversees listed companies.
• Malaysian Competition Commission (MyCC). Governs and regulates anti-competitive practices.
• Central Bank of Malaysia. Regulates cross-border flow of funds and acquisition of banks and insurers.
• Regulators for the relevant business sectors. For example, Malaysian Communications and Multimedia Commission (MCMC), Malaysian Investment Development Authority (MIDA), Construction Industry Development Board (CIDB), and Petroliam Nasional Berhad (PETRONAS).

Key legislation in respect of M&A activity in Malaysia includes the CA, the CMSA, the Takeover Rules, and the Listing Requirements.

Regulatory approvals or notifications may be required depending on the transaction structure and business sector and, while Malaysia is generally open to foreign investment, sector-specific equity restrictions (including Bumiputera/Malaysian ownership requirements) may apply in industries such as telecommunications, financial services, distributive trade, transportation and logistics, and energy sectors. Shareholders’ approval may be required where the transactions trigger the thresholds as provided under the relevant laws and regulations, including the CA and the Listing Requirements.

In Malaysia, the principal forms of consideration in M&A transactions are cash, shares or a combination of both. The choice between cash and shares consideration is typically driven by commercial considerations, regulatory parameters and the intended deal structure. Considerations may also be structured on a deferred or contingent basis (such as through earn-out arrangements) depending on the nature of transactions.

Due diligence in Malaysian M&A transactions is typically tailored to the nature of the target and transaction. From a legal perspective, due diligence focuses on, amongst others, the target’s corporate structure, constitutional documents, material contracts, licences, litigation, employment, real property and intellectual property. Financial and tax diligence assesses financial performance, liabilities, working capital and tax exposures. Commercial diligence considers business operations, key risks and market position. The objective of due diligence is to identify and determine the material risks, valuation and appropriate contractual protections, including warranties, indemnities, covenants, limitation of liabilities and conditions precedent for inclusion in the relevant transaction documents.

Access to information of the target is generally permitted subject to contractual or statutory confidentiality obligations as may be applicable to the target. For listed targets, access is further constrained by insider trading laws under the CMSA and disclosure obligations under the Listing Requirements.

Disclosure of personal data by the target is subject to the requirements of the Personal Data Protection Act 2010 (PDPA). In practice, due diligence will typically assess whether the target has obtained valid consent from data subjects and has complied with the provisions of the PDPA for the processing of personal data, particularly where the personal data forms part of the assets being transferred in an asset sale.

The use of W&I insurance in Malaysia has grown recently, especially in private equity and auction-style transactions, though it is not yet widespread. It is commonly used where sellers want to exit cleanly while minimising post-closing liability.

W&I insurance transfers the risk of breaches of representations and warranties from the seller to an insurer and typically covers warranties, liability limits, retention and survival periods. In a typical Malaysian sponsor-led exit, a stapled W&I policy is structured to reflect the SPA warranty package, allowing the buyer to make claims directly against the insurer while the seller’s liability is limited to a nominal amount, with identified risks excluded and addressed separately.

W&I insurance helps facilitate a clean exit by providing buyers with broader protection from the perspective of coverage and duration. It can also help to make auction bids more competitive and simplify negotiations by reducing dependence on indemnities and limiting points of dispute, with a view to improving deal certainty and execution.

Malaysia generally maintains a liberal regime for foreign investment.

While there is no single overarching legislation restricting foreign ownership, foreign investment in Malaysia is regulated by the regulators in the relevant industry sectors. In exercising their regulatory and licensing power, these regulators impose ownership restrictions, such as foreign equity limits, requirements for Malaysian or Bumiputera ownership and board representation.

The disclosure and announcement requirements for public M&A transactions in Malaysia are primarily governed by the Takeover Rules and the Listing Requirements.

Disclosure requirements under the Listing Requirements

Besides the general disclosure obligations under the Listing Requirements to immediately announce any material information, public listed companies are required to announce transactions where the percentage ratios exceed specified thresholds. Depending on the size and nature of the transaction, this may also trigger additional requirements, including the issuance of a circular to shareholders for shareholder’s approval.

Disclosure requirements under the Take-over Rules

For transactions triggering the general offer obligations under the Takeover Rules, disclosure obligations arise at multiple stages of a takeover process.

Pre-announcement of offer

Disclosure may be required prior to a firm offer where the offeree company is subject to rumours or speculation about a possible offer or there is undue movement in the offeree company’s share price or trading volume. This typically takes the form of a holding or preliminary announcement.

Firm intention announcement

A bidder must make an immediate announcement of a firm intention to make an offer upon triggering the relevant obligation under the Takeover Rules. This announcement must include key information such as the identity of the ultimate offeror, offeror and all persons acting in concert with the offeror, the terms and conditions of the offer (including the basis of the offer price and consideration, if other than by way of cash), and the offeror’s intentions in respect of the offeree company.

Offer documentation

The bidder must submit and dispatch an offer document to the board of the offeree company, the shareholders of the offeree company and holders of convertible securities of the offeree within the timelines prescribed under the Takeover Rules. The offer document must comply with prospectus-level disclosure standards and include details of the offer, financing arrangements and any irrevocable undertakings from shareholders. The offeree company must also ensure that an independent adviser is appointed to advise the board of the offeree company, the shareholders of the offeree company and the holders of convertible securities of the offeree to reach a properly informed decision on the offer.

Ongoing disclosure during and after the offer period

Disclosure obligations continue throughout and after the offer period, and the occurrence of certain events may result in additional disclosure being required, including disclosure of dealings in:

• securities of the offeree company by the offeror and persons acting in concert with the offeror;
• securities of the offeree company by certain offeree company associates; and
• securities of the offeree company by advisers appointed for or in connection with the offer.

Additional disclosure is also required for disclosure of shareholdings upon certain prescribed thresholds being crossed (including the 5% substantial shareholder threshold under the CA and the Listing Requirements) and announcements of any material changes to the terms and conditions of the offer.

These requirements are designed to ensure that all shareholders have timely, accurate and sufficient information to make an informed decision and that the take-over process is transparent and fair.

Continuing disclosure (listed companies)

Public listed companies must ensure that no disclosure of material information is made on an individual or selective basis to any person unless such information has been previously fully disclosed and disseminated to the public.

Public listed companies are also required to maintain continuing disclosure obligations under the Listing Requirements. This includes the requirement to immediately announce any material information and to provide clarification to any rumours or reports of speculation or unusual market activity.

Public takeovers in Malaysia are regulated primarily by the Takeover Rules, supplemented by the Listing Requirements.

Structure of takeover offers

A takeover is effected by way of a voluntary or mandatory general offer. A mandatory offer is triggered where an acquirer obtains more than 33% of the voting shares of a company, or increases its stake beyond prescribed creep thresholds, and must be extended to all shareholders on equal terms.

Key procedural steps. The takeover process follows a prescribed sequence:

• the offeror formulates and notifies the offeree board of the proposed offer;
• a firm intention announcement is made;
• the offer document is submitted to the SC and dispatched to offeree company shareholders;
• the offer remains open for acceptance for a prescribed period, subject to minimum acceptance conditions; and
• the offer is declared unconditional (if applicable), followed by settlement of consideration.

Once announced, an offer may only be withdrawn with regulatory consent.

Competing bids and deal protection

Competing bids are permitted and the regime is designed to promote an open and competitive process. The Takeover Rules prohibit special deals or favourable arrangements with selected shareholders and require equal treatment of all shareholders.

Deal protection measures such as exclusivity arrangements, “no-shop” provisions and break fees are not typical in Malaysian public takeovers and are subject to regulatory scrutiny, particularly where they may inhibit competing offers or prejudice minority shareholders.

Minority shareholder rights

Minority shareholders are afforded statutory protections under the takeover regime and the CA, including:

• squeeze-out rights, where an offeror acquiring at least 90% of the shares subject to the offer may compulsorily acquire the remaining shares not held by it;
• sell-out rights, allowing minority shareholders to require the offeror to acquire their shares on the same terms; and
• voting and approval rights in respect of certain corporate transactions under applicable laws and the Listing Requirements.

Competition considerations

Malaysia does not currently have a general merger control regime. However, the Competition Act 2010 prohibits anti-competitive agreements and abuse of dominance, and transactions may be subject to review by MyCC where competition concerns arise.

M&A disputes in Malaysia are typically resolved through arbitration or litigation. Arbitration is increasingly the preferred choice of dispute resolution as it offers parties the confidentiality of dispute resolution, finality of awards and the ability to select arbitrators with the relevant expertise. Parties may adopt local or foreign institutional arbitration rules (e.g. the Malaysian AIAC Rules or the Singapore SIAC rules), with the seat of arbitration being Malaysia or abroad, depending on the commercial agreement of the parties.

Litigation before the Malaysian courts remains relevant, particularly for domestic transactions or where urgent relief is required (e.g. injunctions), or where disputes involve statutory rights or regulatory matters. As to governing law, Malaysian law is typically adopted for domestic transactions, while cross-border transactions may adopt foreign governing law, with dispute resolution mechanisms structured accordingly.

Emerging technologies, particularly AI and fintech, are increasingly driving M&A activity in Malaysia by boosting demand for digital infrastructure and encouraging collaboration across industries. Investments by major technology players such as Microsoft, Google, and Amazon Web Services have accelerated data centre development especially in Johor. This has led to more deals in sectors like energy, telecommunications and construction.

At the same time, widespread use of AI across industries is driving acquisitions focused on gaining technology, data and specialised capabilities, rather than traditional assets. Fintech growth, particularly in digital banking, payments and alternative finance, is further increasing deal activity and encouraging partnerships between financial institutions, tech firms and platform businesses.

Additionally, emerging technologies, such as AI and digital infrastructure, are facilitating the speed at which M&A processes are taking place resulting in improved efficiency. Parties are beginning to explore tools like AI-powered due diligence and secure digital platforms, potentially enabling quicker deal execution especially in cross-border transactions.

These trends are reshaping how deals are done — transactions are increasingly structured as joint ventures, minority investments or strategic partnerships, rather than full acquisitions. Valuations are also shifting toward future growth potential, scalability and data value.

Overall, AI and fintech are pushing Malaysia’s M&A market towards more technology-driven, partnership-based and future-focused transactions, while also introducing greater complexity in deal structuring and valuation.

The proposed introduction of a cross-sector merger control regime in Malaysia represents a material shift in the execution of corporate M&A transactions. MyCC has confirmed that it is pursuing amendments to the Competition Act 2010 to introduce a merger control framework, with a consultation paper outlining, amongst others, a hybrid notification model for merger transactions that have the effect of substantially lessening competition. Transactions exceeding prescribed thresholds would require notification to and clearance by MyCC under the proposed merger control regime, transforming deals from purely private arrangements into regulated processes subject to suspensory approval, while transactions below prescribed thresholds may be voluntarily notified to MyCC.

For dealmakers, merger control will become a core workstream, requiring early-stage competition analysis, tailored deal structuring, and careful allocation of regulatory risk. Malaysia is expected to remain attractive for domestic and cross border transactions, albeit within a more sophisticated and compliance driven M&A environment.