March 16 2021 While Hong Kong SAR saw a modest decline in the number of M&A deals for 2020, the total deal value rose overall compared to 2019, thanks to a solid recovery in the second half of the year. There has been an increase in outbound activity, with a focus on Chinese target companies. Heightened geopolitical tensions and logistical difficulties caused by COVID-19 have presented challenges to cross-border deal-making, resulting in lengthened deal timetables and market uncertainty as buyers conduct more-detailed due diligence exercises to assess the commercial and regulatory risks of their targets. Hong Kong SAR continues to be a hub for large-scale private and public M&A transactions. However, due to depressed equity valuations in 2020 resulting from the pandemic, there has been an increased number of take-private and private investment in public equity (PIPE) deals. The state of the capital markets overall heavily influences deal pricing and valuations, particularly in the case of public transactions.