China’s Advanced Manufacturing Sees M&A Surge Fueled by Tech Trends

A review of M&A transactions over the past three months reveals a clear trend of deepening industry chain consolidation and an increasingly technology-oriented approach in China’s advanced manufacturing sector. These deals underscore buyers’ strategic motivations to adapt to evolving competitive dynamics, strengthen core competencies, and drive transformative growth.

​​I. Accelerated Consolidation in the EV and Auto Parts Sector​​

The new energy vehicle (NEV) supply chain has witnessed the most active M&A activity. ​​Geely Automobile​​’s acquisition of a ​​17.5% stake in InfiMotion​​ enhances its in-house electric drive system capabilities, aligning with its strategy to reinforce core operations and optimize supply chain efficiency. Meanwhile, ​​Wuhan LingDian Automobile Electronics​​ secured a ​​98.43% stake in Suzhou Auto Electronic Control System​​, solidifying its position in automotive electronic control systems. Additionally, ​​YAPP Automotive Systems​​ plans to acquire a ​​54.5% stake in Yingshuang Electric​​, a specialist in rotary transformers and specialty motors, while ​​CALB​​ is set to take control of ​​Jiangsu Olive Sensors High-Tech​​. These moves reflect the strategic push by leading automakers and battery manufacturers to vertically integrate critical components.

​​II. Strategic Expansion in Smart Manufacturing and Industrial Automation​​

In the industrial automation space, ​​Bozhon Precision​​ acquired a ​​70% stake in Shanghai Well-ideal Industrial Automation​​, aiming to enhance its intelligent equipment design and system integration capabilities. ​​Huizhou Intelligence Technology​​ successfully bid for a ​​75% stake in Shanghai Aerospace Yigen Intelligence Technology​​, strengthening its intelligent control and software capabilities. These transactions highlight buyers’ focus on bolstering system integration and technological barriers to capitalize on the convergence of manufacturing and smart technologies.

​​III. Strengthening Domestic Substitution in Advanced Materials and Components​​

M&A activity has also surged in advanced materials and high-end components. ​​NBTM New Materials​​ acquired a ​​34.75% stake in Shanghai Future High-tech​​, a leader in powder metallurgy components, reinforcing its critical parts manufacturing capabilities. ​​IKD​​’s acquisition of ​​ZEB (Ningbo) Precision Electromechanical​​ enhances synergies with its automotive parts business while expanding its footprint in robotics. Meanwhile, ​​Ningde New Energy Technology​​ invested in ​​Shandong Fuyuan Technology​​, a silicon-carbon anode material specialist, signaling heightened interest in upstream raw materials. These transactions reflect how industrial capital is rapidly building domestic substitution capabilities and self-sufficient supply systems in core components and advanced materials sectors.

​​Conclusion​​

Overall, M&A deals in China’s advanced manufacturing sector primarily target three strategic objectives:

1. ​​Vertical Integration​​ – Enhancing control over critical supply chain segments and driving synergies.
2. ​​Technology Leadership​​ – Building competitive moats in automation, smart manufacturing, and advanced materials.
3. ​​Ecosystem Expansion​​ – Transitioning from single-point capabilities to integrated system solutions.

M&A has become a pivotal tool for advanced manufacturers to accelerate strategic transformation and strengthen core competitiveness in an increasingly dynamic market landscape.

Author:

Yijie Zeng

M&A Analyst