What’s ahead for M&A activity in 2024/25

Who doesn’t love a crystal ball for the new year, especially if it’s brimming with public M&A?  In the words of Chanticleer columnist James Thomson, "the gap between what buyers want to pay and sellers are prepared to accept is finally closing." Cautious optimism is in the air with M&A activity set to pick up in 2024/2025. As we look to an increase in deals, we share our top three insights for deal makers coming out of our recently held M&A Conference in collaboration with Allens and Herbert Smith Freehills.

Top 3 Insights

1. Private equity players are expected to ‘step up’ their activity. It’s a truism, but private equity players have dry powder and we expect them to play a big role in public M&A next year.  In addition, if the AUD remains weak against the USD, North American sponsors will have a strong upper hand against Australian companies in competitive bids.  Sponsors should hit the accelerator when interests rates steady – the question is when that will be?  And we’ll leave the answer to RBA Governor Michele Bullock’s crystal ball.
2. Expect regulatory headwinds to stick around. Dealmakers will continue to face a global push by competition regulators to act tough on deals and tighten merger laws. Down Under, we expect M&A deals involving listed companies to continue to come under the antitrust microscope.  Regulatory policy will shift in new directions too: ACCC Chair Gina Gass-Gottlieb was clear at the M&A Conference that Australian merger laws need to reflect the fact Australia is undergoing two transitions that are creating an accompanying period of uncertainty – the ongoing digitisation of the economy, and the sweeping energy transition. The ACCC also firmly believes the merger regime must allow the watchdog to act faster and consider the ways competition has change. Watch this space. 
3. The two strikes rule is still top of mind, 12 years on – with Boards spending more time than ever managing increasingly noisy and sometimes newly activated shareholders. Next year, we expect investor activism to be seen across all assets classes and industries.  While no-one likes a back-seat driver, investors who receive thoughtful and timely engagement from listed entities can often be relied on for support, rather than opposition, to deals and strategic plans.  There is no one-size fits all model.  Finally, the ditching of the two strikes rule would be up the top of our Christmas wish list, but Santa has denied us for the last dozen years and we don’t see North Pole or Canberra policy changing any time soon.