M&A Activity in Australia: Trends and Predictions for 2020

Mergers and acquisitions in Australia are set to continue evolving in 2020. This blog will focus on the latest trends, including cross-border deals, technology sector acquisitions, and strategic partnerships.

In 2020, Australia's mergers and acquisitions (M&A) landscape experienced notable developments, influenced by both domestic and international factors. Understanding these trends is essential for businesses aiming to navigate the evolving market effectively.

1. Cross-Border M&A Activity

Australia's strategic location and robust economic fundamentals continued to attract international investors. The declining Australian dollar, reaching a five-year low of US61c, made Australian assets more attractive to offshore dealmakers. This currency depreciation led to increased M&A activity, particularly from US private equity firms such as Bain Capital and CC Capital, which engaged in a $2.9 billion bidding war over Insignia Financial.

2. Technology Sector Acquisitions

The technology sector remained a focal point for M&A activity. Companies sought to enhance their digital capabilities and expand their market reach through strategic acquisitions. This trend was driven by the increasing demand for digital transformation and innovation across various industries.

3. Strategic Partnerships and Joint Ventures

In response to market uncertainties, businesses increasingly pursued strategic partnerships and joint ventures. These collaborations allowed companies to pool resources, share risks, and leverage complementary strengths, facilitating entry into new markets and the development of innovative products and services.

4. Regulatory Environment

The Australian government maintained a stable regulatory environment, providing clarity and confidence for M&A activities. However, businesses remained vigilant regarding potential changes in competition laws and foreign investment regulations, which could impact future deal structures and approvals.

5. Industry-Specific Trends

Certain sectors experienced heightened M&A activity:

Resources: Australia's rich natural resources continued to attract foreign investment, with several significant deals in the mining and energy sectors.
Healthcare: The healthcare sector saw increased consolidation, driven by the pursuit of efficiencies and expanded service offerings.
Consumer Goods: Companies in the consumer goods industry engaged in M&A to diversify product lines and strengthen market positions.

In 2020, Australia's M&A landscape was characterized by increased cross-border activity, a focus on technology sector acquisitions, and a rise in strategic partnerships. These trends reflect a dynamic market environment where businesses are actively seeking growth opportunities and competitive advantages.

If you would like to enquire about M&A advisory services, book a complimentary consultation with DGMS Group.

The Australian. (2024). Australia 'treasure island' for offshore dealmakers. Retrieved from https://www.theaustralian.com.au/business/lower-dollar-makes-australia-a-treasure-island-for-offshore-dealmakers/news-story/1b30602e76e5adc7573d4cd2b46eb8a6
Norton Rose Fulbright. (2020). Australian public M&A deal trends report. Retrieved from https://www.nortonrosefulbright.com/en-nl/knowledge/publications/830eacf6/australian-public-ma-report-2020
Herbert Smith Freehills. (2020). Australian Public M&A Report 2020. Retrieved from https://www.herbertsmithfreehills.com/insights/2020-10/australian-public-ma-report-2020
KPMG. (2020). Consumer & Retail M&A trends 2020: Pursuing opportunities amid uncertainty. Retrieved from https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2020/03/consumer-and-retail-m-and-a-trends-2020-pursuing-opportunities-amid-uncertainty.pdf
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