Global M&A is having a remarkable year. Against a backdrop of shifting trade policies, regional conflict and an unprecedented wave of AI-related investment, dealmaking has proven remarkably resilient. According to statistics shared by the Institute for Mergers, Acquisitions and Alliances (IMAA), 2026 is expected to close with more than 41,000 deals worth around US$5.3 trillion, possibly surpassing the record set in 2021.

Look a little closer, however, and the story is about size rather than breadth. A handful of very large transactions are carrying the cycle, while the number of deals remains well below previous peaks.

Singapore tells a different story, and in my view a more interesting one. IMAA expects around 655 transactions here this year, worth about US$100 billion. Value is lower than in an exceptional 2025, but deal count remains within its normal range, and the steady flow of mid-market activity, rather than megadeals, is a true measure of the ecosystem’s health. That resilience reflects the wider economy, with the Ministry of Trade and Industry upgrading its 2026 growth forecast to 4.5-5.5%.

It is in this less visible part of the market, among small and medium-sized enterprises (SMEs) and mid-sized businesses, that I believe some of the most consequential shifts are now taking place. Increasingly, M&A is no longer an option or a conversation limited to large corporates. SMEs and founder-led companies are also starting to consider it as part of their long-term planning.

Succession should be a strategy question, not a retirement question

SMEs make up 369,500 of Singapore’s 371,000 enterprises and employ around 2.49 million workers. How these businesses grow, and how they continue beyond their founders, is therefore not only a private or family matter. It is part of Singapore’s broader economic resilience.

In our conversations with owners, M&A tends to come up at one of two situations: when they are planning for continuity, and when they are planning for growth. Continuity is usually the harder of the two to talk about.

Succession planning, in particular, has not kept pace. A report by HSBC Global Private Banking found that 81% of Singapore entrepreneurs consider it important to keep the business in the family and preserve its legacy, but more than half appear to have no succession plan in place. The hesitation is understandable. For many founders, the company is closely tied to their identity, family and life’s work. When the business is performing and the owner remains capable, succession rarely feels as urgent as sales, manpower or cash flow.

The trigger for these conversations has also shifted. Not long ago, many founders saw M&A as something for listed companies and headline deals. Today, they hear that a competitor has been acquired, a supplier has consolidated, or a peer has been approached by a strategic buyer. That prompts a different kind of reflection: What is my business worth? What happens if my children do not want to take over? How would I prepare if the right partner came along?

The risk is that vulnerabilities often surface only when a transition is already under consideration. Key customer relationships may still sit with the founder. Senior managers may run individual functions without having led the whole company. Financial records may meet tax requirements but offer little insight to an external party. Family members or shareholders may hold different assumptions about the company’s future. None of these issues is unusual, but each one narrows the owner’s options when the time comes.

Japan offers a useful reference point. Business succession has been a national conversation there for many years, and if I had to sum up one thing I have seen time and again is that owners who prepare early tends to have the widest range of choices. Preparation does not commit anyone to a sale. It keeps every path open, whether that is family succession, a management transition or a partnership with an external party.

This is also why I find the phrase “selling out” unhelpful. Each of these paths is legitimate, each comes with its own trade-offs, and none is a verdict on what the founder has built. The same HSBC study found that 22% of Singapore entrepreneurs were interested in selling as an exit route. I do not see that as a retreat from legacy, but as a sign that owners are becoming more open to different ways of protecting it.

Why Singapore is well placed

The second moment is growth. Singapore’s compact domestic market means many ambitious businesses eventually reach a natural ceiling on organic growth.

Owners recognise this. A DBS survey found that 82% of 730 companies polled planned to expand overseas in 2026, while the Singapore Business Federation’s National Business Survey found that 59% of businesses were already internationalised in 2025. Partnerships, investment and acquisitions are becoming practical routes to the markets, capabilities and talent that organic growth alone cannot always reach.

What sets Singapore apart is its standing as the region’s deal hub. Singapore ranked first in Southeast Asia by announced deal value in the first quarter of 2026, and IMAA notes that the city state accounts for the majority of ASEAN’s total deal value.

Behind these figures lies something less easily measured: trust. Strong governance, a reliable legal framework and deep regional connectivity make Singapore companies credible partners. For a well-run Singapore SME, that reputation is a genuine asset, whether the owner is planning for succession, growth, or both.

Japan and Singapore: a two-way corridor

The relationship between Japan and Singapore illustrates this well. This year, the two countries marked 60 years of diplomatic relations by upgrading ties to a Strategic Partnership. On the ground, the business rationale is equally compelling.

Many Japanese SME and mid-sized owners face pressures of their own – shrinking population, tightening labour supply and a mature domestic market. Many are looking to ASEAN for their next stage of growth, and Singapore is often the first stop. Singapore companies, in turn, may be seeking continuity, capital, technology or a strategic partner to support regional expansion.

So I do not see this as a story of Japanese buyers and Singapore sellers. Rather, it is a corridor built on complementary needs. Many Japanese strategic buyers take a long-term view, placing weight on continuity, trust and stable operations rather than treating an acquisition purely as a financial transaction. For founders concerned about legacy, that perspective can reshape how M&A is understood. A good match, however, still depends on candid discussions early on what will change, what will remain local, and what role the founder and management team will play.

The corridor is also becoming more structured. This year, more than 50 regional bankers from Japan visited Singapore through Nihon M&A Center’s M&A Study Program. In Japan, regional banks are often the first point of contact when SME owners consider succession or overseas growth. When the institutions that advise owners invest in understanding Singapore, it signals a corridor maturing well beyond individual transactions.

Interest is growing faster than readiness

Openness, however, is not the same as readiness. Research by the Association of Small and Medium Enterprises (ASME) found that while 60% of SMEs are open to M&A and partnerships, 82% describe their deal knowledge as poor or basic. The barrier is no longer appetite. It is a lack of preparation, knowledge and access to trusted guidance.

We see this gap quite often, even in businesses that look perfectly healthy. When owners go into discussions without clear expectations or a good understanding of how deals are structured, they can miss good opportunities or agree to terms that don’t really work for their business, their employees or the buyer.

This is understandable. For most founders, selling or transitioning a business is something they will only do once in their lifetime, so the guidance they receive al...

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