NEW ZEALAND Trends and Developments Contributed by: Lance Jones, Olivia Hausmann, Chris Dann, Sam Wilson, Geoff Hosking and Jordan Wright, Anthony Harper
New Zealand’s mature cross-border M&A market con - tinues to build momentum, with deal volumes in 2025 showing an improvement from the lows of previous years and steadily growing from quarter to quarter. Looking ahead, it is anticipated that 2026 will be a promising year for inbound M&A, driven by the New Zealand government’s recent reforms to the overseas investment regime and other pro-investment initia - tives, a more stable and favourable economic envi - ronment and widespread improvements in investor sentiment. In this article, the authors reflect on the M&A trends of 2025 and discuss predictions for the M&A market in 2026. Upcoming legislative changes and other devel - opments that are poised to have a significant impact on the level of foreign investment in New Zealand are also outlined. The 2025 M&A Market There was a general sense of optimism coming into 2025 that it would be a good year for M&A as com - pared to the bumpy levels in 2024, when the economic and geopolitical backdrop did not support risk-taking or deal-making. Although this did not occur initially, and in many respects the first half of 2025 was dis - appointing from a cross-border M&A perspective, a number of significant cross-border transactions were successful. Deal flow improved quarter on quarter throughout 2025, with the total number of deals announced at the end of Q3 2025 up 21% from the number of deals in Q2 2025, and up 14% year on year from the end of Q3 2024 (according to recent data published by Price - waterhouseCoopers (PwC)). Based on the firm’s own experience and the opinions of other advisers, this impetus has continued throughout Q4, and there is widespread optimism that market conditions and buy- and sell-side sentiment will meet in 2026 to underpin continued growth in deal volumes across a range of sectors. Who is buying? Trade buyers have accounted for a large proportion of New Zealand’s deal activity in 2025, with private equity (PE) participation being relatively low com - pared to prior years. According to PwC’s Q3 2025
M&A update, trade buyers have represented approxi - mately 88% of the 131 M&A transactions announced from Q1 to the end of Q3 this year. Plenty of “behind the scenes” activity has also been seen from PE buy - ers in the small to mid-market on deals that have not been announced and therefore are not reflected in those stats. Overseas buyers have accounted for roughly half of all M&A transactions this year. As is often the case, the primary sources of cross-border deal volumes have been Australian and United States investors, followed by Canadian and European pension funds, Singapore and Middle East sovereign wealth funds, state-owned enterprises (SOEs) and other institutional investors. What are they buying? Quality assets with stable and growing earnings despite the various headwinds have attracted the most interest in the market – especially in sectors that align with mid-to-long-term market and sector trends and offer long-term growth prospects. Artificial intel - ligence (AI) alignment is a cherry on top. Conversely, businesses that have struggled over the last couple of years or have taken a hit to their growth trajectory have faced difficulties proving their valua - tion to investors, leading to prolonged due diligence and negotiation processes and/or aborted processes. The technology, media and telecommunications (TMT) sector continued to drive the most M&A activity in 2025, with significant investment in AI and software development and New Zealand’s maturing technology sector. Financial services and infrastructure assets, including greenfield clean energy infrastructure, have also been popular investment targets. The construction, retail and hospitality sectors face significant headwinds and have therefore seen low levels of M&A activity over the last two years, and this is likely to continue in 2026. Deal structures The most successful transactions have seen tightly managed competitive processes used to create time pressure, eliminate process drag risk, push up valua - tions and ultimately drive deal execution. Conversely,
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