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Strong year of dealmaking ahead, ‘with more high-value transactions to come’
Herbert Smith Freehills and Corrs Chambers Westgarth have been advising on the proposed $4.3 billion acquisition of CSR Limited by Compagnie de Saint-Gobain. Here, HSF partners Tony Damian and Amelia Morgan reflect on this high-value transaction and offer insights into the M&A market in Australia.
Grace Robbie
National law firm Corrs has advised international light and sustainable construction company Saint-Gobain on its acquisition of Australian-New Zealand multinational building products company CSR, while global firm HSF is advising CSR on this high-value transaction.
Corrs team is led by its head of corporate, Sandy Mak, who commented: “We are delighted to support Saint-Gobain on his highly strategic transaction that enables it to establish a leading presence in the high-growth Australia construction market.
“This deal demonstrates Corrs’ expertise in advising on unique situations in the content of large cross-border transactions, which required a team effort from a wide range of practice groups across the country.”
HSF’s team has been led by partners Tony Damian and Amelia Morgan.
Damian said: “We are delighted to be acting for CSR on this important transaction. The offer is an acknowledgement of the successful execution of CSR’s strategy. It also demonstrates the attractiveness of Australia as an investment destination.”
Morgan added: “It has been a pleasure to work closely with the CSR team to date, and we are looking forward to continuing to work with them as we move towards implementation of the deal.”
State of M&A in Australia
When asked by Lawyers Weekly regarding their outlook on the potential for more high-value transactions in the coming year, Morgan expressed confidence and remarked: “We expect 2024 to be another strong year for Australian dealmaking with more high-value transactions to come, springboarding off the wave of deals that have been announced since the end of last year.”
Reflecting on the firm’s recent involvement in such transactions, Morgan underscored the vibrant state of merger and acquisition activities in Australia.
“The transaction between CSR and Saint-Gobain shows the continued strength of M&A activity in Australia, and demonstrates the continued strong interest from foreign bidders in quality Australian assets, including in the industrials sector,” she commented.
Current trends in M&A
Reflecting on the current state of M&A, Morgan shared her insights into what she perceives to be the predominant trends in M&A this year.
“Consolidation in key industries, the energy transition and the continued focus by bidders on various ESG considerations continue to be a key driver of M&A activity in Australia. We expect bidders, both foreign and domestic, to continue to pursue high-quality assets to navigate these issues, which the deal between CSR and Saint-Gobain illustrates,” she said.
Challenges in M&A and how to navigate them
When discussing the current state of M&A, Morgan highlighted that the “regulatory environment” will continue to remain one of the foremost challenges for M&A this year. However, she offered valuable advice on how lawyers can effectively navigate this challenge.
“In terms of challenges, the ever-changing regulatory environment continues to be a key challenge for deals, with more formal merger clearance procedures in Australia looking to be on the horizon following the reforms proposed to Australia’s merger clearance regime last year.
“Preparation and early engagement is likely to be key to navigating these issues going forward,” Morgan stated.
Lawyers role in the current M&A climate
As M&A continues to evolve and undergo transitions in Australia, Morgan emphasised the significance of lawyers’ roles in this dynamic landscape and offered guidance on navigating their expanding responsibilities within this field.
“As the regulatory environment for M&A transactions continues to evolve and become more complex, the role of lawyers on M&A deals is becoming more and more important.
“Lawyers are increasingly becoming key strategic advisers to their clients on M&A transactions, particularly where regulatory issues in some transactions are a matter of ‘deal or no deal’,” she commented.
