The M&A opportunity in Central Asia: A conversation with KPMG

Kazakhstan is targeting $62.7 billion in total investment for 2026, including $25.5 billion in foreign capital, according to The Times of Central Asia. As the region’s largest economy, this investment drive signals a broader growth phase that is reshaping the Central Asian market.

To understand the region’s opportunities and challenges, I spoke with Saltanat Sandykbayeva, Partner at KPMG. Saltanat shared her views on current investor sentiment and the impact of geopolitical tensions like the Iran conflict, as well as the sectors poised to drive activity in the months ahead.

Q. Can you tell me about your career journey and your current role at KPMG?

I began my career in the audit department at KPMG Kazakhstan, where I worked with major financial institutions. After two years, I transitioned into Financial Advisory, spending the next five years specializing in M&A, financial due diligence, and valuations across a range of sectors, from oil and gas to pharmaceuticals and consumer products.

From there, I moved into industry as the M&A Director for Eurasian Resources Group, a leading mining company in Kazakhstan. A significant part of my role was dedicated to attracting investments, including through the Astana International Exchange (AIX).

I later returned to KPMG to help build and expand the firm’s M&A advisory practice in Uzbekistan. During this period, I led a number of complex M&A engagements, including the privatization of an oil refinery, as well as transactions involving manufacturing facilities, five-star hotels, banks, and leading fintech companies. 

Today, I’m a Partner for KPMG Caucasus and Central Asia, leading investment advisory projects with a primary focus on the banking, insurance, and TMT sectors, supporting clients as they navigate growth, transformation, and cross-border investment.

Q. With your front-row view, how would you describe the M&A landscape in Central Asia right now?

The region is entering a particularly dynamic phase, underpinned by strong economic fundamentals. In both Kazakhstan and Uzbekistan, and across Central Asia more broadly, GDPs are actively growing. In 2025, it averaged 6% growth, outpacing many advanced economies. This is driven by a diverse mix of sectors, including manufacturing, energy, power and utilities, tourism, and large-scale infrastructure projects.

The active development of nuclear power plants in both Kazakhstan and Uzbekistan, alongside initiatives such as China-Kyrgyzstan-Uzbekistan railway and the Trans-Caspian corridor, is redefining regional connectivity and trade flows. Together, these are shifting the economics of the entire region and driving an exciting growth phase.

Looking ahead, the region has set ambitious annual investment targets, creating a growing pipeline of opportunities for both international and local players. While certain structural constraints remain, such as continued dominance of state-owned enterprises, a steady wave of reforms has opened up a range of investable assets that we’ve not seen in previous years.

Q. It’s clearly an active market. To what extent are current geopolitical tensions, such as the Iran conflict, affecting investor sentiment?

It’s true that geopolitical tensions influence the economy and M&A activity, especially in Central Asia, where many economies remain closely linked to commodities. However, these pressures have so far failed to undermine the region’s broader structural tailwinds.

Despite being a landlocked region, Central Asia has demonstrated the ability to adapt to uncertainty. While we see some impact on deals involving Gulf country investors, transaction activity is ongoing. The region’s ability to remain resilient amidst these crises is a point of interest for analysts and investors.

Q. Your experience is varied, from Bitcoin mining to hospitality and energy companies. Which deals have been most exciting to work on?

I won’t single out specific deals, but what I can say is the most exciting ones are those that combine technical complexity with a meaningful, real-world impact. In M&A advisory, you’re constantly juggling multiple stakeholders, and every engagement comes with unique challenges. While the work is demanding, it’s incredibly rewarding when you deliver practical solutions that provide genuine value.

I don’t have a single “favorite” sector, as each industry brings something different to the table and continues to spark my interest. For example, right now, energy is particularly fascinating because of the CAPEX challenges involved in modernizing legacy infrastructure.

Q. When advising on cross-border deals in Central Asia, what are the primary hurdles regarding valuations and deal execution?

There’s still a noticeable gap in valuation expectations between buyers and sellers. International investors typically apply more conservative risk discounts, primarily due to regulatory changes, currency volatility, and execution risks in emerging markets.

On the other hand, local sellers, for example, government entities, often approach valuations differently. They typically rely on historical performance and recent growth trends, and may even seek “acquisition premiums.” This is essentially the additional cost a buyer pays above a target company’s current fair market value to acquire a controlling stake. 

To close this gap, we’re increasingly seeing more sophisticated deal structures come into play, including earn-outs, staged payments, and joint-venture arrangements that better align risk and reward for both sides.

Beyond valuation, regulatory approval remains the primary hurdle for execution. The timeline often depends on the depth of due diligence and post-signing integration requirements. Other challenges include currency risk, the dominance of state-owned enterprises (SOEs), and data transparency in certain sectors. These obstacles are real, but with the right advisory and local knowledge, they’re entirely manageable.

Q. After a deal is signed, where are investors typically finding the most value? What are the first operational or strategic changes they make?

Investors find the most immediate value in operational optimization, digital transformation, and “strategic repositioning.” This often involves using an Uzbek or Kazakh asset as a regional base to facilitate growth into neighboring countries.

When an international investor enters, their first move is usually an “ESG upgrade” and a shift toward global governance best practices. By investing upfront in areas like ESG, IFRS compliant financial reporting, and transparent governance, companies gain a competitive advantage. These measures not only strengthen internal operations, but also reposition companies from purely local players into internationally investable assets.

Q. What will define the next wave of M&A in Central Asia, and which sectors or deal types will drive it?

The next wave of M&A will be defined by the energy transition as companies shift toward renewable sources, alongside a growing focus on critical mineral security. This is essential for ensuring a sustainable supply of materials vital to national defense and modern technology. 

Alongside this, we expect further activity in digital infrastructure, particularly around AI and data centers, as demand for computing power and secure data ecosystems continues to grow.

In the tech and fintech spaces, I anticipate rapid growth backed by VC scaling, while in the mining sector, strategic acquisitions will be driven by supply chain security. 

Finally, “corridor-related” assets, such as logistics and manufacturing hubs along the region’s new trade routes, will be a major driver of M&A activity.