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M&A market will continue to increase, Corrs predicts
With the merger and acquisition market reaching its highest deal volume in over a decade, Corrs Chambers Westgarth anticipates that M&A activity will remain robust and continue to gain momentum over the next 12 months.
Grace Robbie
Despite ongoing economic uncertainties and evolving regulatory pressures that have continually reshaped the merger and acquisition (M&A) landscape, the past 12 months have seen a notable resurgence in the M&A market, with deal volume reaching its highest level in over a decade.
In its recent M&A 2025 Outlook report, Corrs Chambers Westgarth predicts that while the coming year may “present some challenges”, the market is well positioned for “continued, above-average levels of activity”, supported by strong underlying foundational drivers.
The national law firm produced this detailed analysis of the Australian public M&A market by drawing on proprietary transaction data and in-depth research covering the 12-month period ending 30 September 2024.
Sandy Mak, head of corporate at Corrs, remarked that the surge in M&A activity over the past year has instilled confidence in the firm that this strong momentum will be sustained in the upcoming year.
“Last year saw much higher levels of activity in the public M&A market than we have experienced in a long time, and while the year ahead will have some challenges, we believe that these elevated activity levels will continue. Interest rates are stable, and there is a strong appetite to get deals done, so our outlook for M&A for the coming year is vibrant,” Mak said.
She attributed the surge in the M&A market to a combination of factors that contributed to a “strong appetite” for deals to be completed.
“Available capital, a strong appetite for strategic growth in sectors such as technology, healthcare and renewable energy, and a need to secure a competitive advantage are all factors that have driven increased activity and fostered a generally optimistic sentiment,” Mak said.
Even with the challenges posed by “economic headwinds”, Mak has acknowledged that Corrs anticipates an increase in private equity activity in the upcoming year, particularly within the private M&A sector.
“Despite macro-economic headwinds, including persistently elevated inflation globally and domestic issues such as sluggish growth expectations, housing affordability and cost-of-living pressures, we expect to see private equity activity ramp up in 2025 in particular in private M&A,” Mak said.
Mak also highlighted that, based on the national law firm’s report, the energy and resources sector is expected to remain a dominant focus for deal-making in 2025.
“We anticipate that the energy and resources sector will continue to lead the Australian M&A landscape, having maintained its top position for the third consecutive year,” she said.
“Additionally, we expect the tech sector to remain one of the most active for M&A activity in Australia, with private capital playing a significant role”.
Alongside a record volume of deals, Adam Foreman, partner at Corrs, disclosed that the M&A 2025 Outlook report also indicated notable improvements in deal success rates and a marked acceleration in deal timelines within the M&A market.
“In the last 12 months, we’ve seen a notable improvement in deal success rates compared to last year.
“Additionally, deals were completed much faster, with time frames shortened by almost 95 days compared to the previous year. Dual bid structures were more prevalent and relatively successful, and there was a significantly higher number of direct pre-bid stakes for bidders compared to prior years,” Foreman said.
While the number of deals and the success rates showed notable improvements, the Corrs report noted a marked decline in the overall value of these transactions. Specifically, the total value of deals dropped substantially from approximately $78.2 billion in 2023 to $46.1 billion in 2024, while the average deal size decreased from $1.4 billion to $782 million.
The M&A 2025 Outlook report also revealed a significant shift in the profile of bidders, with foreign bidders – for the first time in over five years – dominating the Australian M&A market, accounting for 54 per cent of all bidders.
Additionally, the Corrs report highlighted a sharp increase in hostile transactions, with approximately 22 per cent of all deals involving hostile elements at some stage, up from just 13 per cent in 2023.
